Hours-long Microsoft outage disrupts businesses, governments globally

Nov 13 (Reuters) - A more than 12-hour outage of Microsoft Outlook and Teams crippled communications for businesses and governments globally on Friday, forcing some organizations to revert to fax machines and halting at least one bond repurchase in Europe.

Microsoft said server issues were behind the incident that also affected its Copilot AI assistant and that a broader roll-out of software fixes was starting to stabilize the system. It said it was not aware of any malicious activity.

Outlook and Teams are two of the most widely used workplace applications with hundreds of millions of users. The outage prevented people from performing essential functions such as sending emails, managing calendars and hosting virtual meetings.

It affected government agencies from Australia to Japan and the United States, caused delays at trading firms, hindered some companies from publishing earnings and prompted airlines to warn customers of communication lags, according to public statements.

Organizations that host Microsoft services on their own servers, rather than in the cloud, were somewhat spared.

ANOTHER OUTAGE FOR MICROSOFT

The outage is one of the longest in Microsoft's history and the second disruption to its services this year.

Microsoft said the outage specifically hit features tied to Exchange Online - its cloud-based email and scheduling hub - leaving unconnected applications operational.

The incident deepens questions about the global reliance on a handful of Big Tech companies that supply both the essential software and the cloud infrastructure that underpins it.

Microsoft shares fell 1.7% before the bell, lagging the broader market. They have gained roughly 8% so far this year.

"The bigger worry is that this is not the first Microsoft 365 outage this year," said Josh Gilbert, a market analyst at trading platform eToro.

"If reliability starts to look like a recurring problem, it hands every IT department a reason to think twice before putting even more of their business in one provider’s hands."

Still, some analysts have questioned whether such incidents can push customers on to rivals due to the steep switching costs of replacing tools embedded so deeply in daily operations.

Microsoft faced an outage with its 365 services in January this year and also in October last year. Last month, it reported an outage of its Azure cloud platform that impacted its suite of productivity software, and a range of industries worldwide. 

TRADES HAD TO BE CONFIRMED BY FAX

A spokesperson for the UK government said it was working with Microsoft to find a solution for the outage that hit organizations such as the NHS and London’s Metropolitan Police.

Lack of access emails and other services was impacting the Metropolitan Police's ability to report some crimes online, though its ability to respond to calls was not affected.

NHS said its local services were turning to alternate measures such as using IT systems or paper records.

For businesses, the fallout was widespread.

European exchange operator Euronext reported email disruptions, British insurer Aviva activated backups for its earnings calls and Danish shipping giant Maersk warned customers of delayed updates.

American AI giants OpenAI and Anthropic also faced issues with Microsoft connectors, while Indian airlines IndiGo, Akasa Air and Air India said their email support services were impacted.

The outage also disrupted fund management at Taiwanese securities firms, life insurers, and investment trust companies. One of the companies went as far as cancelling a bond repurchase transaction, a source familiar with the situation told Reuters.

Another Taiwanese financial company resorted to using fax to confirm trades, a second source said.

In the US, electric truck maker Workhorse Group rescheduled its results on Thursday to November 16, while Switzerland's Richemont briefly delayed its first-half results announcement on Friday.  

In Australia, where the spy agency and federal police were among organizations caught in the outage, Cyber Security Minister Tony Burke said Microsoft does not suspect a cyber attack.

"The impact that they are dealing with ... is very much on email systems," the minister added.

(Reporting by Aditya Soni, Harshita Mary Varghese, Anzar Mehraj, Katha Kalia, Preetika Parashuraman, Shubham Kalia, and Akanksha Khushi in Bengaluru, Stefica Bikesh in Sydney, Chris Thomas and Mrinmay Dey in Mexico City, Liang-sa Loh in Taipei; Additional reporting by Jeffrey Dastin; Editing by Leroy Leo, Stephen Coates, Elaine Hardcastle, Devika Syamnath)