How a group of tech ‘rebels’ triggered the world’s biggest IT meltdown

When George Kurtz announced the establishment of his new company CrowdStrike in 2012 on his blog, few outside the tech industry would have noticed.

Kurtz, along with Dmitri Alperovitch (CTO) and Gregg Marston (CFO), wrote that he wanted to change the way the cybersecurity industry responded to hacking and cyber breaches. 

He wanted to assemble a “dream team” of tech experts. A group of rebels, he called them, who believed “the current state of security is fundamentally broken and want to do something about it”.

More than a decade on, the company has been wildly successful in achieving that goal.

But it wasn’t until Friday that it became a household name, and for all the wrong reasons. The world has been grappling with what’s been billed as the largest IT failure in history, and CrowdStrike is right at the centre of it.

The remarkable success of the company is in part what led to the global IT outage that swept the world over the past 48 hours and triggered a wave of interruptions of crucial services.

How CrowdStrike turned from a startup into a global player

Kurtz was a former engineer at McAfee for many years. But he had grown disillusioned with the approach taken to cybersecurity across the industry.

In one of his blog posts, Kurtz wrote he was: “Tired of the status quo of technologies that were incapable of dealing with the most persistent attacks. 

“Tired of the malware-centric approaches that only focus on 40 per cent of the problem. Tired of on-premise security technologies that are disconnected, overly complex, easy to break, and costly to administer.”

The idea behind CrowdStrike was different. He and his co-founders set out to develop a new approach to what’s known as cloud-based endpoint security. The company’s slogan was simple: “We stop breaches.”

To achieve this, CrowdStrike built a new type of cybersecurity service that burrowed deep into the systems of companies and services that relied on them. The idea was to provide a bigger base of protection.

There was — Kurtz has said — some scepticism within the industry, but their approach took off. Their signature product, Falcon Platform, was designed as a one-stop shop for security needs to detect malware and stop cyber attacks.

There was strong interest in this new approach from private equity groups. It was initially backed by private investors like Accel and Warburg Pincus. In 2014, it received major backing from Google Capital, raising more than $100 million.

In 2015, Marston announced he was retiring and left the company as CFO. Kurtz and Alperovitch continued on, quickly expanding and growing their client bases all over the world.

The company launched subsidiaries in Australia, the United Kingdom, India, Germany and Canada.

In 2019, CrowdStrike became a publicly listed company in the US. Since then it’s been backed by large institutional investors.

Vanguard is currently the largest shareholder, followed by Blackrock, Jennison Associates, State Street Global Advisors, Invesco Capital Management and Geode Capital Management.

Kurtz himself also continues to hold shares in the company.

In 2020, co-founder Alperovitch left the business to set up a not-for-profit.

The company has chipped away at competitors — including Microsoft — with bombastic statements and snipes about the company’s security failures, including: “Microsoft’s security products can’t even protect Microsoft”.

Since CrowdStrike was launched, the endpoint security market has rapidly grown and is now worth at least $8 billion.

Today, CrowdStrike dominates the market. A 2022 market share report noted that it held more than 17 per cent — followed closely by Microsoft’s Azure program, which is a major competitor.