Last Friday, some applications and services under Microsoft, the American tech giant, became inaccessible, experiencing access delays, limited functionality, or complete unavailability, resulting in "blue screens" on users' computers. This incident sounded the alarm for global cybersecurity, and China urgently needs to accelerate the research and development of independent cybersecurity products.

Stimulated by this news, on July 22, domestic software and cybersecurity sectors opened significantly higher. In terms of individual stocks, Jiayuan Technology (301117.SZ) and Hengfeng Information (300605.SZ) saw 20% gains, while Renzihang (300311.SZ) rose over 10%, and Guohuawang'an (000004.SZ) and Geer Software (603232.SH) both hit the 10% daily limit.

Microsoft "Downtime" Shocks Multiple Industries

On July 19 local time, some applications and services under Microsoft became unusable, triggering a massive global downtime event. It is understood that the incident was caused by a software update from global cybersecurity company CrowdStrike.

Currently, the impact of Microsoft's downtime continues. By Sunday, the United States had seen more than 1,000 flights canceled for the third consecutive day. This global IT failure disrupted various industries, including airlines, railways, finance, healthcare, hotels, and many enterprises and individual users' work and lives were affected.

On July 20, Microsoft announced that the global technical failure had affected 8.5 million devices running Windows operating systems, accounting for about 1% of all Windows devices. Although the percentage is small, the extensive economic and social impacts show that many companies in critical sectors are using CrowdStrike's software.

Microsoft stated that software updates can occasionally cause problems, but failures of this magnitude are not common. This incident highlights the interdependence of a vast ecosystem that includes global cloud service providers, software platforms, cybersecurity, and other software vendors.

Google Trends shows that searches for "Microsoft Blue Screen" and "Windows" surged on July 19, with the incident briefly topping the trending charts.

Information and Technology Innovation Regains Focus on Independent Control

In this incident, China's affected scope was relatively small, and domestic substitution played a role, including in software development, operating systems, cybersecurity, and other areas.

At the end of September 2022, the State-owned Assets Supervision and Administration Commission issued Document No. 79, comprehensively guiding and requiring state-owned enterprises and centrally administered enterprises to implement the localization of information technology systems, mandating the full localization of information technology. In May 2024, new national testing results showed an increase in server operating system products, with major internet companies such as Huawei Cloud, Alibaba Cloud, and Tencent Cloud, as well as enterprises like Kylin Information Security and Neusoft, entering the market. The kernel versions of desktop operating systems have also been comprehensively upgraded, primarily including Kylin, Tongxin, and Founder desktop operating systems.

Debang Securities noted in a research report that the cloud computing and cybersecurity industries have developed rapidly in recent years, with China's cloud security market growing rapidly and its share of the overall cybersecurity market continuing to increase. With frequent global cloud security incidents and China's information technology innovation policies, a batch of cybersecurity companies with core competitiveness is expected to emerge.

Looking at the global situation, geopolitical factors continue to disturb, and the trend of anti-globalization intensifies, making the demand for independent control more urgent. From the perspectives of national security, information security, and industrial security, the information technology innovation sector necessitates strong national support and accelerated enterprise development, with some companies possessing core products and competitiveness expected to benefit significantly.

Based in Beijing, Baolande is a high-tech software enterprise specializing in the research and promotion of basic software, with product lines covering middleware, container PaaS platforms, intelligent operation and maintenance, big data, and other directions in the basic software field. With a wide product coverage and stable and reliable quality, Baolande has completed its overall product layout over a decade of development, laying a solid foundation for enhancing its core competitiveness and long-term development.

In addition to the telecommunications industry, Baolande's products have also been widely applied in finance, government, energy, and other industries. In terms of domestic substitution, the company actively promotes the localization of middleware, leveraging its deep technical accumulation in this field to provide domestic middleware products to China's three major telecom operators, gradually replacing the foreign software giants that previously served these companies and becoming a leader among domestic middleware brands.

Apart from Baolande, companies such as Guohuawang'an, Renzihang, and Geer Software have also made significant contributions in the information technology innovation sector, striving to contribute their share during the process of domestic substitution.

A Wake-up Call for Cybersecurity

The Microsoft downtime incident has far-reaching impacts and also brings essential insights to the industry. The incident not only affected computer users worldwide but also demonstrated the importance of selecting reliable technologies in the field of cybersecurity. For China, strengthening the research, development, and application of localized and independently controllable cybersecurity products to further enhance national cybersecurity capabilities is a top priority.

Industry insiders analyze that Microsoft's global blue screen incident serves as a reminder for China's cybersecurity. Going forward, the government should continue to increase support for the research and promotion of domestic cybersecurity products, providing policy and financial support to encourage technological innovation by enterprises; strengthen cooperation between enterprises, research institutions, and universities to promote the transformation of scientific research results and facilitate technological progress and product innovation.

Simultaneously, encourage enterprises to increase R&D investment, develop cybersecurity products with independent intellectual property rights, and further enhance product competitiveness; prioritize breakthroughs in key technologies such as operating systems, databases, and middleware, reducing reliance on external technologies; actively participate in or lead the formulation of international standards, enhancing the discourse power and influence of domestic technologies in the international market; strengthen security reviews of imported cybersecurity products to ensure they do not pose a threat to national cybersecurity.