Microsoft’s second 365 outage of the year stretched into Friday business hours across Africa and Asia-Pacific, and investors are now weighing the disruption less as a technical glitch than as a question mark over the reliability of one of the world’s most entrenched enterprise software franchises.
The outage, which the company attributed to server problems, hit Outlook, Teams and Copilot and lasted roughly 12 hours. At its peak, Downdetector recorded more than 130,000 reports of Outlook problems in the US around 1 p.m. ET on Thursday, with more than 18,000 reports still logged at 11:30 p.m. ET. By early Friday local time, the tracker showed outages across several Microsoft services in India, Australia and Japan, and users in South Africa were also affected.
The commercial exposure was broad. US AI companies OpenAI and Anthropic reported issues with Microsoft connectors, a notable point given how much of the AI industry’s distribution runs through the software giant’s platforms. Indian airlines IndiGo and Akasa Air said their email support services were affected. In Taiwan, the disruption reached fund management operations at securities firms, life insurers and investment trust companies, and one company went as far as cancelling a bond repurchase agreement transaction it had already scheduled, according to a source familiar with the situation who spoke to Reuters and declined to name the firm.
Government customers were caught up as well. Australia’s spy agency and federal police were among the organisations affected, and Home Affairs and Cyber Security Minister Tony Burke told a press conference 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, adding that the impact was “very much on email systems.” The US House of Representatives said the outage affected its users and that its engineers were working with Microsoft, while Japanese Deputy Chief Cabinet Secretary Masanao Ozaki said the government’s information system infrastructure was being affected.
Meanwhile, Microsoft’s own account pointed to a partial fix. In a service health notice, the company said features of Microsoft 365 services that depended on Exchange Online, its cloud-based messaging platform delivering email, calendar, contacts and tasks, were affected, while elements that did not rely on Exchange Online remained functional. It had applied adjustments to the affected servers, but these did not result in sustained recovery, though some partial recovery was observed in the regions where the adjustments were applied. Microsoft added it was “not aware” of any malicious activity behind the outage. “We’re reviewing what additional actions we can take to improve overall infrastructure stability,” the company said on X.
For investors, the immediate read was measured. Josh Gilbert, a market analyst at trading platform eToro, said investors would likely look past the episode, but warned 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.”
The track record gives that concern some weight. Microsoft faced a 365 outage in January this year and another in October last year, and last month reported an outage of its Azure cloud platform that affected its productivity software suite and a range of industries worldwide. The financial consequences are already tangible: electric truck maker Workhorse Group, which had been expected to report third-quarter results on November 12, pushed the date back to November 16, citing business disruptions caused by the global Microsoft outage.
The episode follows the CrowdStrike malfunction of 2024, one of the largest internet disruptions, which hobbled technology systems in hospitals, banks and airports and highlighted the vulnerability of interconnected technologies. For corporate clients weighing where to concentrate their software spending, the question now is whether concentration risk is starting to carry a visible price.