Update: Microsoft blames a network capacity upgrade for its outage, now in 74 countries

Microsoft has now given a partial explanation for the outage that has knocked out Outlook, Teams and Copilot since Thursday. According to BBC News, the company attributed the disruption to an issue during an earlier network capacity upgrade, and says it has "addressed the underlying issue" while it restores service to the remaining customers and regions. Our earlier update noted that no root cause had been named. This is the first one on the record, and a full root-cause report is still promised.

What changed since this morning

• A cause, in outline. Per the New York Times, Microsoft said there is "no indication this is the result of malicious or cyber activity" and called it "a technical issue not related to cyber or A.I." agents.
• The footprint. BBC reports problems in at least 74 countries. The Times, citing Downdetector, says more than 70 countries and territories. The two counts differ because they use different measures, so treat both as "more than 70."
• Recovery. Microsoft told customers email queues were "significantly reduced and approaching normal levels," with "intermittent issues" still possible, and extended the email timeout window to 48 hours so late messages are held rather than bounced.
• Apology. Microsoft said it was "deeply sorry" and that it is "seeing broad recovery and stability."

Why it took so long, per an outside expert

BBC quoted Prof James Ferryman of the University of Reading, reading Microsoft's disclosures: the part of the servers that sets up secure connections got swamped, and the failure snowballs because one overloaded server hands its work to the next while phones and laptops keep retrying. Services cannot simply be switched back on at once and have to come back in stages. That is an outside interpretation, not Microsoft's own account. Gergely Orosz, a former engineer at Skype and Uber, told the BBC he could not recall a business-email outage lasting this long.

The first hard business cost

BBC reports that electric truck maker Workhorse Group, due to report third-quarter results on Nov. 12, rescheduled to Nov. 16, citing business disruptions caused by the outage. It is the first case we have seen of a listed company moving a financial report because of it. BBC also reports that the City of Austin told staff they could not send or receive email while its phone lines and 911 stayed up, and that Unity Health Toronto, which runs several Toronto hospitals, declared a "code grey" for an infrastructure failure.

For a small business the practical point is unchanged from our Main Street piece: phone and text anything with a deadline or a dollar amount, and do not resend everything, because delayed originals may still arrive with the delivery time, not the send time, on them. Microsoft's own site puts Microsoft 365 use at more than 430 million people, per BBC, which is why a partial recovery still leaves a long tail of stuck mail.

On the stock, our chart data puts Microsoft at $524.48, 5.6% below its Nov. 4 peak. We are not attributing any of that move to the outage, and we have not seen evidence of financial guidance changes from Microsoft. See Microsoft stock: what is going on.

What to watch

Whether Microsoft publishes the promised root-cause report, whether service credits are offered to business customers, and whether more companies delay filings or results the way Workhorse did.

Sources: BBC News; BBC News, how the outage was felt around the world; The New York Times. This is market information, not investment advice.