Nov 12 (Reuters) - A disruption of Microsoft services such as Outlook, Teams and Copilot stretched into Asia-Pacific business hours on Friday after affecting thousands of US users, as the tech giant struggled to fix server problems it blamed for the outage.
The outage hit government agencies in Australia, Japan and the United States, as well as companies including OpenAI and Anthropic. It is the second disruption to Microsoft's 365 services this year, raising concerns that repeated failures could
push corporate clients to question Microsoft's reliability.
In its latest update, Microsoft said it had applied adjustments to the affected servers, but they did not result in sustained recovery. It said it had observed some partial recovery in the regions where it applied the adjustments.
"We're reviewing what additional actions we can take to improve overall infrastructure stability," the company said on X.
Downdetector, which tracks outages by collating status reports from a number of sources, showed more than 18,000 reports of Outlook problems in the US at 11:30 p.m. ET (0430 GMT). It also showed outages for several Microsoft services in the Asia-Pacific region, including India, Australia and Japan, early Friday local time.
At its peak, Downdetector showed more than 130,000 reports of Outlook problems in the US around 1 p.m. ET on Thursday. The outage has lasted for about 12 hours.
In a service health notice, Microsoft said features of Microsoft 365 services that depended on Exchange Online and email were affected, while elements that did not rely on Exchange Online remained functional. Exchange Online is the company's cloud-based messaging platform that delivers email, calendar, contacts, and tasks.
The company added that it was "not aware" of any malicious activity that was causing the outage.
IMPACT ON EMAIL SYSTEMS
Australian Home Affairs and Cyber Security Minister Tony Burke said that Microsoft believed it was not dealing with a cyberattack.
"They believe they are dealing in some ways similar to what we saw with respect to CrowdStrike where there is an update that has gone awry," Burke said at a press conference.
"The impact that they are dealing with ... is very much on email systems," the minister added.
Australia's spy agency and federal police were among organizations caught up in the outage on Friday.
The CrowdStrike malfunction of 2024 was one of the largest internet disruptions, hobbling technology systems in hospitals, banks, and airports, highlighting the vulnerability of the world's interconnected technologies.
The US House of Representatives said the outage impacted its users and its engineers were working with Microsoft.
Japanese Deputy Chief Cabinet Secretary Masanao Ozaki told reporters that the outage was affecting the government’s information system infrastructure.
BUSINESSES FEEL THE IMPACT
US AI companies OpenAI and Anthropic said they had faced issues with Microsoft connectors, while Indian airlines IndiGo and Akasa Air 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 agreement transaction it had already scheduled, a source familiar with the situation told Reuters, declining to provide the name of the company.
Josh Gilbert, a market analyst at trading platform eToro, said investors would likely look past the outage but that repeated disruptions could hurt Microsoft over time.
"I think investors will take this in their stride for now, because very few of these customers can realistically walk away from the Microsoft ecosystem overnight," Gilbert said.
"The bigger worry is that this isn’t the first 365 outage this year, and 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. The market will want to see Microsoft prove it can keep the lights on before it asks customers to spend more on Copilot."
Microsoft faced an outage with its 365 services in January this year and also in October last year.
Microsoft last month reported an outage of its Azure cloud platform that impacted its suite of productivity software, and a range of industries worldwide.
Electric truck maker Workhorse Group, which was expected to report third-quarter results on November 12, rescheduled it to November 16 citing business disruptions caused by the global Microsoft outage.
(Reporting by Harshita Mary Varghese, Anzar Mehraj, Katha Kalia, Preetika Parashuraman, Shubham Kalia 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 and Stephen Coates)
