Microsoft fires back at Delta after massive outage, says airline declined 'repeated' offers for help (2024)

Microsoft fired back at Delta Air Lines on Tuesday accusing the carrier of not modernizing its technology before it canceled thousands of flights in the wake of last month's global massive IT outage.

Delta CEO Ed Bastian told CNBC last week that the carrier has "no choice" but to seek damages from Microsoft and CrowdStrike for the mass disruptions, which he said cost the company, an airline that prides itself on reliability, about $500 million.

Delta struggled more than rival airlines to recover from the outage, canceling more than 5,000 flights in the days following the July 19 incident, which was sparked by a botched software update from CrowdStrike and affected millions of computers running Microsoft Windows.

Mark Cheffo, a Dechert partner representing Microsoft, said in a letter Tuesdayto Delta's attorney David Boies of Boies Schiller Flexner, said Microsoft is still trying to figure out why American Airlines, United Airlines and others were able to recover more quickly than Delta.

"Our preliminary review suggests that Delta, unlike its competitors, apparently has not modernized its IT infrastructure, either for the benefit of its customers or for its pilots and flight attendants," Cheffo wrote.

Delta responded on Tuesday that it has "a long track record of investing in safe, reliable and elevated service for our customers and employees.

"Since 2016, Delta has invested billions of dollars in IT capital expenditures, in addition to the billions spent annually in IT operating costs," Delta said in response to the Tuesday letter from Microsoft," the airline said in a statement.

In a July 29 letter, Boies told Microsoft's chief legal officer, Hossein Nowbar: "We have reason to believe Microsoft has failed to comply with contractual requirements and otherwise acted in a grossly negligent, indeed willful, manner in connection with the Faulty Update" from CrowdStrike that caused Windows computers to crash, Boies told Microsoft's chief legal officer, Hossein Nowbar, in a letter dated July 29.

Microsoft lawyer Cheffo wrote in his response that the company empathizes with Delta and its customers on the impact of the CrowdStrike incident. "But your letter and Delta's public comments are incomplete, false, misleading, and damaging to Microsoft and its reputation," he said.

Microsoft's letter followed a similar one from CrowdStrike on Sunday rejecting claims from the Atlanta-based airline. Cheffo wrote that Microsoft offered to help Delta for free. Each day from July 19 to July 23, Microsoft employees said they could help, but Delta turned them away, according to the letter.

Delta CEO Bastian told CNBC's Squawk Box" that CrowdStrike didn't offer any financial compensation but did extend "free consulting advice" on dealing with the fallout from the outage.

Microsoft CEO Satya Nadella emailed Bastian, "who has never replied," Cheffo wrote Tuesday. CrowdStrike also said its CEO George Kurtz had reached out to his counterpart at Delta "but received no response."

Cheffo described a letter on July 22, from Microsoft to a Delta employee, offering help. The Delta employee wrote back: "All good. Cool will let you know and thank you."

Delta executives said the outage, which led to more cancellations than in all of 2019, overwhelmed its crew-scheduling platform that matches crews to flights. But Cheffo said Delta doesn't rely on Windows or Microsoft's Azure cloud services.

In 2021, IBM announced a multiyear deal with Delta to help it implement a hybrid-cloud architecture running on Red Hat's OpenShift software. In 2022, Amazon said Delta had picked the digital commerce company's Amazon Web Services unit to be its preferred cloud provider.

"It is rapidly becoming apparent that Delta likely refused Microsoft's help because the IT system it was most having trouble restoring — its crew-tracking and scheduling system — was being serviced by other technology providers, such as IBM, because it runs on those providers' systems, and not Microsoft Windows or Azure," Cheffo wrote in his letter.

Bastian said last week Delta had to manually reset 40,000 servers.

Microsoft demands that Delta retain records showing how much technologies from IBM, Amazon and others contributed to the airline's issues from July 19 to July 24, Cheffo wrote. Spokespeople for IBM and Amazon didn't immediately provide comment.

Bastian told CNBC last week, "If you're going to be having access, priority access, to the Delta ecosystem in terms of technology, you've got to test this stuff. You can't come into a mission critical 24/7 operation and tell us we have a bug. It doesn't work."