Microsoft 365 Outage Could Cost Australian Businesses Billions, Adviser Says
RSM Australia's Ashwin Pal said the Microsoft 365 outage on Friday will cost Australian businesses billions of dollars, with small firms hit hardest. Microsoft said it was "deeply sorry" and had addressed the underlying issue after roughly 18 hours of disruption.
The Microsoft outage that knocked out Outlook and other Microsoft 365 services on Friday, November 13, 2026, is expected to cost Australian businesses billions of dollars, according to RSM Australia Risk Advisory partner Ashwin Pal. The outlook outage expected cost is likely to fall hardest on small firms, he said.
The disruption began around 3:15 am AEDT on Friday. Many users could not open email or got errors across the Microsoft suite, including SharePoint. Some workers resorted to fax machines to keep operating.
Why the bill keeps growing
Pal said professional service firms such as law and accounting practices could lose hundreds of thousands of dollars per hour. The bigger expense comes afterward, he said.
"It's not just the initial downtime, it's more actually about then the catch up effort because that costs money," he said. He added that the financial impact was expected to last weeks.
Pal pointed to the 3.9 million businesses globally that use the Microsoft suite, many without backup systems. He also warned the damage could grow as the US and Europe came online. "It's billions of dollars. And don't forget, it's actually going to get worse," he said.
Small businesses carry the risk
Larger companies can absorb a hit like this more easily, Pal said. "You take a CBA as an example, they'll be able to absorb an impact like this a lot easier than the five-person accounting shop down the road," he said.
Tracey Tucker, owner of Queensland firm Regal Shower Screens, said the lost day would cost at least $30,000. "I'm paying my girls sitting in here in the office to do nothing," she said. Orders could not go through, and she expects delays to customers once suppliers face a Monday backlog.
IT support specialist James Coates said his helpdesk runs on Outlook, so his team had to phone clients one by one. Chloe Mombeshora of telecommunications company Hubify said less tech-savvy clients thought their internet was down.
What Microsoft said
Microsoft said it was "deeply sorry" and had "addressed the underlying issue". It described the cause as a technical issue unrelated to cyber-attacks or AI agents, and said it was restoring services gradually.
The company has suggested the fault may have come from settings applied to servers that keep Microsoft 365 running. Outage tracker Down Detector logged nearly 130,000 problem reports across 74 countries at its peak, starting about 6pm GMT on Thursday.
The disruption reached well beyond Australia. UK hospitals, GPs, schools and police forces reported problems, and US government offices, including congressional offices, were affected. Microsoft shares dipped 1.1% to $516.86 when Wall Street opened.
Services began to recover just before midday GMT on Friday, after roughly 18 hours. Microsoft said email queues were "significantly reduced and approaching normal levels".
