3 ms·

Bankruptcy coming ....

by bdcravens 2y ago

7thaccount 2y ago
I'm curious if that will actually happen as these companies need to use something to check their compliance box.
- femiagbabiaka 2y ago
  Correct. To move away there have to be alternatives. Who here is building the alternative?
- SoftTalker 2y ago
  Yeah I think it will be quickly forgotten. Most people already have where I work. It was just another IT fail in a long line of them.
  - dylan604 2y ago
    This was what I kept thinking about when it happened. Every job I've ever had has had days of some system or other being down for some amount of time. Hell, even WFH has put me offline when I've had extended power outage after a major storm. The only thing different about this was that it was all the companies at the same time because of one glitch. For all of the companies that did not use this system, it was just another day of the week.
- xyst 2y ago
  There are competitors in this space. Palo Alto Networks comes to mind. Whether competitors have same issues as ClownStrike remains to be seen.
  - AmericanChopper 2y ago
    The two problems I see with this story are 1) These types of products cause incidents all the time, this was just a very high impact one that happened to affect everybody all at once. 2) Their product is very good compared to the competitors. All products in this space are black boxes, but CS is one of the least black-boxy, the alerts it produces are decent, the tooling is comes with is especially good (from an operator perspective), and the reporting it produces is exactly the sort of thing decision makers in big enterprise love to see. I doubt there’s going to be much churn from this, definitely not an existential amount. As much as I personally can’t stand the organisation, I think they absorbed most of the bad press on behalf of all the service providers they took offline.
hnlmorg 2y ago
Unlikely. Big enterprises are slow to change and switching provider would be a massive change. They’re more likely to investigate running two platforms simultaneously or, more likely, talk to competitors purely as a bargaining chip to negotiate a bigger discount for the next renewal.
- deleted 2y ago
  [deleted]
- dylan604 2y ago
  You can sue your provider and still continue to use that provider. Look at the Apple vs Samsung lawsuits as an example
  - hnlmorg 2y ago
    The Apple vs Samsung situation is very different to this but I do take your point. The end result is still the same though, CrowdStrike will lose a lot of income and confidence but they’re not going out of business. Frankly, even if they were to, I’m certain they’d end up getting bailed out anyway. But I can’t see it getting to the point to begin with.
- chasd00 2y ago
  yeah that's my gut feeling. Also, no one at these enterprises are to blame they can all point fingers at CloudStrike and abuse their account reps. That way they don't have to put in the work to actually switch vendors while appearing like they're "on it". I bet they all get pretty nice discounts on renewal like you said but that will be it.
CivBase 2y ago
They were valued near $100B prior to this incident and even now their valuation is north of $60B. Even if they were held financially responsible for all $6B in damages - which is definitely not going to happen - that doesn't seem like a company-ending scenario. Their biggest problem is obviously going to be with customer retention, but there are huge technical and regulatory hurdles their customers would have to go through to switch to a competitor. I'm sure many of their customers will accept this as an isolated incident and be quick to accept CrowdStrike's assurances that this won't happen again. I think Delta Airlines is probably in more trouble right now than CrowdStrike.
- d1sxeyes 2y ago
  As far as I can tell, CS is still up 75% over 12 months.
- quickthrowman 2y ago
  They profited ~$125M last quarter, depending on their profit growth it could be 6-12 years of profits if they have to eat $5B of lawsuit judgements. Even 10% of that is the profits from a whole year.
dheera 2y ago
The real problem is their stock crashed, so their best engineers will probably leave, and then it will become increasingly worse in a feedback cycle until possible eventual bankruptcy. Ideally the stock price should be pushed up to attract better engineers to go in and fix shit. If stockholders agree to bid up the stock 100% YoY, hell, even I'd look for a job there, and help fix shit in return for some juicy RSUs. If you take away their funding, you can only expect worse in the future.
- chgs 2y ago
  Crashed? Since the start of the year CRWD is up 5%
  - dheera 2y ago
    Since the beginning of time everything is up 10000000% It crashed in the last week. That's what matters.
    - cjpearson 2y ago
      But since most engineers probably started before last week, wouldn't they be still up quite a bit? Even with the crash it's up 75% over the past year.
      - dheera 2y ago
        They just lost a lot though, losing incentive to stay. But they provide a public good, so it would help for the public to bid the stock up to get the employees to stay, fix things, and vest it rather than ditching the company.
        gkuhl21 2y ago
        Is that how stonks work? It sounds quite close to throwing good money after bad.
ridgeguy 2y ago
Lawsuits may crater CrowdStrike. I'll be surprised if they carry adequate insurance against this large a screwup.
- EasyMark 2y ago
  I think they'll be a fraction of their current size in just a couple of years. This was just too big and there are too many competitors out there for the space. The market will fix this problem, slowly as usual
btbuildem 2y ago
I think what's more likely is their stock will drop for a while, this will blow over, and everyone will continue to pay their licence fees as if nothing ever happened. Don't underestimate the inertia, ineptitude, and resistance to change that permeates the upper echelons of large corps.
- red-iron-pine 2y ago
  tho they've taken a hit and lost some business, for sure, there are still a lot of people using SolarWinds...

Bankruptcy coming ....

7thaccount 2y ago

I'm curious if that will actually happen as these companies need to use something to check their compliance box.

femiagbabiaka 2y ago
Correct. To move away there have to be alternatives. Who here is building the alternative?
SoftTalker 2y ago
Yeah I think it will be quickly forgotten. Most people already have where I work. It was just another IT fail in a long line of them.
- dylan604 2y ago
  This was what I kept thinking about when it happened. Every job I've ever had has had days of some system or other being down for some amount of time. Hell, even WFH has put me offline when I've had extended power outage after a major storm. The only thing different about this was that it was all the companies at the same time because of one glitch. For all of the companies that did not use this system, it was just another day of the week.
xyst 2y ago
There are competitors in this space. Palo Alto Networks comes to mind. Whether competitors have same issues as ClownStrike remains to be seen.
- AmericanChopper 2y ago
  The two problems I see with this story are 1) These types of products cause incidents all the time, this was just a very high impact one that happened to affect everybody all at once. 2) Their product is very good compared to the competitors. All products in this space are black boxes, but CS is one of the least black-boxy, the alerts it produces are decent, the tooling is comes with is especially good (from an operator perspective), and the reporting it produces is exactly the sort of thing decision makers in big enterprise love to see. I doubt there’s going to be much churn from this, definitely not an existential amount. As much as I personally can’t stand the organisation, I think they absorbed most of the bad press on behalf of all the service providers they took offline.

hnlmorg 2y ago

Unlikely. Big enterprises are slow to change and switching provider would be a massive change. They’re more likely to investigate running two platforms simultaneously or, more likely, talk to competitors purely as a bargaining chip to negotiate a bigger discount for the next renewal.

deleted 2y ago
[deleted]
dylan604 2y ago
You can sue your provider and still continue to use that provider. Look at the Apple vs Samsung lawsuits as an example
- hnlmorg 2y ago
  The Apple vs Samsung situation is very different to this but I do take your point. The end result is still the same though, CrowdStrike will lose a lot of income and confidence but they’re not going out of business. Frankly, even if they were to, I’m certain they’d end up getting bailed out anyway. But I can’t see it getting to the point to begin with.
chasd00 2y ago
yeah that's my gut feeling. Also, no one at these enterprises are to blame they can all point fingers at CloudStrike and abuse their account reps. That way they don't have to put in the work to actually switch vendors while appearing like they're "on it". I bet they all get pretty nice discounts on renewal like you said but that will be it.

CivBase 2y ago

They were valued near $100B prior to this incident and even now their valuation is north of $60B. Even if they were held financially responsible for all $6B in damages - which is definitely not going to happen - that doesn't seem like a company-ending scenario. Their biggest problem is obviously going to be with customer retention, but there are huge technical and regulatory hurdles their customers would have to go through to switch to a competitor. I'm sure many of their customers will accept this as an isolated incident and be quick to accept CrowdStrike's assurances that this won't happen again. I think Delta Airlines is probably in more trouble right now than CrowdStrike.

d1sxeyes 2y ago
As far as I can tell, CS is still up 75% over 12 months.
quickthrowman 2y ago
They profited ~$125M last quarter, depending on their profit growth it could be 6-12 years of profits if they have to eat $5B of lawsuit judgements. Even 10% of that is the profits from a whole year.

dheera 2y ago

The real problem is their stock crashed, so their best engineers will probably leave, and then it will become increasingly worse in a feedback cycle until possible eventual bankruptcy. Ideally the stock price should be pushed up to attract better engineers to go in and fix shit. If stockholders agree to bid up the stock 100% YoY, hell, even I'd look for a job there, and help fix shit in return for some juicy RSUs. If you take away their funding, you can only expect worse in the future.

chgs 2y ago
Crashed? Since the start of the year CRWD is up 5%
- dheera 2y ago
  Since the beginning of time everything is up 10000000% It crashed in the last week. That's what matters.
  - cjpearson 2y ago
    But since most engineers probably started before last week, wouldn't they be still up quite a bit? Even with the crash it's up 75% over the past year.
    - dheera 2y ago
      They just lost a lot though, losing incentive to stay. But they provide a public good, so it would help for the public to bid the stock up to get the employees to stay, fix things, and vest it rather than ditching the company.
      - gkuhl21 2y ago
        Is that how stonks work? It sounds quite close to throwing good money after bad.

ridgeguy 2y ago

Lawsuits may crater CrowdStrike. I'll be surprised if they carry adequate insurance against this large a screwup.

EasyMark 2y ago
I think they'll be a fraction of their current size in just a couple of years. This was just too big and there are too many competitors out there for the space. The market will fix this problem, slowly as usual

btbuildem 2y ago

I think what's more likely is their stock will drop for a while, this will blow over, and everyone will continue to pay their licence fees as if nothing ever happened. Don't underestimate the inertia, ineptitude, and resistance to change that permeates the upper echelons of large corps.

red-iron-pine 2y ago
tho they've taken a hit and lost some business, for sure, there are still a lot of people using SolarWinds...