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Cloudflare outage reveals vulnerability of cybersecurity consolidation

When one major cybersecurity firm goes down, like Cloudflare did this week, it can disrupt large swaths of the internet. That’s because a few large companies dominate the market.

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“The ripple effect is not just to one website or two, it's to many websites. And it's not just to one country, it's throughout the globe,” said J.B. Branch with the consumer advocacy group Public Citizen.
“The ripple effect is not just to one website or two, it's to many websites. And it's not just to one country, it's throughout the globe,” said J.B. Branch with the consumer advocacy group Public Citizen.
Global Images Ukraine/Global Images Ukraine via Getty

ChatGPT, X, Shopify, and even the website for New Jersey Transit were inaccessible for a few hours yesterday morning due to an outage at the company Cloudflare.

The cybersecurity firm fixed the issue. But it's a reminder that much of the internet relies on a small number of companies to keep things running.

Like a lot of the tech sector, cybersecurity companies have grown, in part, by acquiring other companies. Those few firms protect lots of websites used every day, said J.B. Branch with the consumer advocacy group Public Citizen.

That means that when there’s an outage, like the one that hit Cloudflare this week, “The ripple effect is not just to one website or two, it's to many websites. And it's not just to one country, it's throughout the globe,” Branch said.

There are reasons many global platforms like Zoom, X, or Uber rely on bigger cybersecurity firms, said Alan Woodward, a professor at the University of Surrey in the UK.

“Especially if you're a big brand, you're a big name, you go for one of these bigger companies, because they're the ones that can help you deal with things on a global scale,” Woodward said.

And, a lot of companies and organizations have decided it’s a better deal to pay another business to handle some of their IT needs rather than doing it all themselves.

“It's economies of scale at the end of the day. We can have a third party that can do it better than we can for cheaper than we can,” said Kevin Cleary at the University at Buffalo School of Management.

The trade-off: sometimes that third party has a problem. So, Cleary said, companies have to ask themselves, “Do we want to roll the dice that every so often, Cloudflare is going to have one of these issues, Amazon is going to have one of these issues, Microsoft is going to have one of these issues,” said Cleary.

A lot of businesses have decided that gamble is worth it. 

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