What can be learned from Austin-based CrowdStrike's outage? Photo via Getty Images

Airlines, banks, hospitals and other risk-averse organizations around the world chose cybersecurity company CrowdStrike to protect their computer systems from hackers and data breaches.

But all it took was one faulty CrowdStrike software update to cause global disruptions Friday that grounded flights, knocked banks and media outlets offline, and disrupted hospitals, retailers and other services.

“This is a function of the very homogenous technology that goes into the backbone of all of our IT infrastructure,” said Gregory Falco, an assistant professor of engineering at Cornell University. “What really causes this mess is that we rely on very few companies, and everybody uses the same folks, so everyone goes down at the same time.”

The trouble with the update issued by CrowdStrike and affecting computers running Microsoft's Windows operating system was not a hacking incident or cyberattack, according to CrowdStrike, which apologized and said a fix was on the way.

But it wasn't an easy fix. It required “boots on the ground” to remediate, said Gartner analyst Eric Grenier.

“The fix is working, it’s just a very manual process and there’s no magic key to unlock it,” Grenier said. “I think that is probably what companies are struggling with the most here.”

While not everyone is a client of CrowdStrike and its platform known as Falcon, it is one of the leading cybersecurity providers, particularly in transportation, healthcare, banking and other sectors that have a lot at stake in keeping their computer systems working.

“They’re usually risk-averse organizations that don’t want something that’s crazy innovative, but that can work and also cover their butts when something goes wrong. That’s what CrowdStrike is,” Falco said. “And they’re looking around at their colleagues in other sectors and saying, ‘Oh, you know, this company also uses that, so I’m gonna need them, too.’”

Worrying about the fragility of a globally connected technology ecosystem is nothing new. It's what drove fears in the 1990s of a technical glitch that could cause chaos at the turn of the millennium.

“This is basically what we were all worried about with Y2K, except it’s actually happened this time,” wrote Australian cybersecurity consultant Troy Hunt on the social platform X.

Across the world Friday, affected computers were showing the “blue screen of death” — a sign that something went wrong with Microsoft's Windows operating system.

But what's different now is “that these companies are even more entrenched,” Falco said. "We like to think that we have a lot of players available. But at the end of the day, the biggest companies use all the same stuff.”

Founded in 2011 and publicly traded since 2019, CrowdStrike describes itself in its annual report to financial regulators as having “reinvented cybersecurity for the cloud era and transformed the way cybersecurity is delivered and experienced by customers.” It emphasizes its use of artificial intelligence in helping to keep pace with adversaries. It reported having 29,000 subscribing customers at the start of the year.

The Austin, Texas-based firm is one of the more visible cybersecurity companies in the world and spends heavily on marketing, including Super Bowl ads. At cybersecurity conferences, it's known for large booths displaying massive action-figure statues representing different state-sponsored hacking groups that CrowdStrike technology promises to defend against.

CrowdStrike CEO George Kurtz is among the most highly compensated in the world, recording more than $230 million in total compensation in the last three years. Kurtz is also a driver for a CrowdStrike-sponsored car racing team.

After his initial statement about the problem was criticized for lack of contrition, Kurtz apologized in a later social media post Friday and on NBC's “Today Show.”

“We understand the gravity of the situation and are deeply sorry for the inconvenience and disruption,” he said on X.

Richard Stiennon, a cybersecurity industry analyst, said this was a historic mistake by CrowdStrike.

“This is easily the worst faux pas, technical faux pas or glitch of any security software provider ever,” said Stiennon, who has tracked the cybersecurity industry for 24 years.

While the problem is an easy technical fix, he said, it’s impact could be long-lasting for some organizations because of the hands-on work needed to fix each affected computer. “It’s really, really difficult to touch millions of machines. And people are on vacation right now, so, you know, the CEO will be coming back from his trip to the Bahamas in a couple of weeks and he won’t be able to use his computers.”

Stiennon said he did not think the outage revealed a bigger problem with the cybersecurity industry or CrowdStrike as a company.

“The markets are going to forgive them, the customers are going to forgive them, and this will blow over,” he said.

Forrester analyst Allie Mellen credited CrowdStrike for clearly telling customers what they need to do to fix the problem. But to restore trust, she said there will need to be a deeper look at what occurred and what changes can be made to prevent it from happening again.

“A lot of this is likely to come down to the testing and software development process and the work that they’ve put into testing these kinds of updates before deployment,” Mellen said. “But until we see the complete retrospective, we won’t know for sure what the failure was.”

CodeLaunch, which pairs startups with software consultants, is returning to Houston this spring. Photo via codelaunch.com

Early-stage accelerator names finalists for its second Houston cohort

ready to grow

A traveling seed-stage accelerator has announced its return to Houston and named its second cohort.

CodeLaunch, produced by Dallas-based constant and software development company Improving and presented by Ohio-based VC network Cyrannus, is returning to Houston. The company's second Houston accelerator event will be held on March 2.

Putting a fresh spin on the seed accelerator model, CodeLaunch combines a startup competition with a tech tradeshow, as well as allows for networking among attendees. Since its inception ten years ago, the touring competition has doled out over $1.4 million in services to its finalists and overall winners.

"CodeLaunch is a startup and rock-n-roll show like nothing you've ever seen before," says CodeLaunch President and Founder Jason W. Taylor in a news release.

The competition pairs six startups with six startup consulting companies. This year's finalists and mentor pairings are as follows:

  • Lake Charles, Louisiana-based GOPHR's consultant mentor is Softeq
  • Port Arthur, Texas-based DrinKicks is paired with BJSS
  • Energy360, based in Houston, has been matched with Honeycomb Software
  • Inpathy, based in Detroit and Tyler, Texas, will work with Contollo
  • Drivingo, led by a student founder from Virginia Tech, is selected to collaborate with Blue People
  • Houston-based AnyShift's consultant mentor is Improving

Houston-based Softeq is returning to the event after working with software startup Codiac.

“CodeLaunch was great. We gained customers, investors, and a lot of local notoriety. It was the best event we had all last year," says Ben Ghazi, founder of Codiac about the event.

ResQ TRX, a Houston startup that provides solutions for the logistics industry, won CodeLaunch HOU 2022. Houston-based Clutch won Judges' Choice in last year's competition.

This year, investment is also on the line. Presenting partner Cyrannus announced that all startup founders who advance to the semifinal round of CodeLaunch will be competing in a $100,000 investment challenge, as well as the $50,000 challenge for impact startups. There would be one or two winners — either a winner for each award or, if a company scores top marks in both categories, one company can take home the entire $150,000.

“Not only will (a winner) get the cash, but also be introduced to a network that will help them refine their idea and get ready for their first big fundraiser," says Lee Mosbacker, founder of Cyrannus, in a news release.

This year's CodeLaunch event will be a part of Houston Tech Rodeo, which is taking place February 27 to March 2 this year. Tech Rodeo, which announced its schedule this week, will conclude its programming with the CodeLaunch event.

"Houston Exponential could not be more excited about our partnership with CodeLaunch Houston," says Houston Exponential CEO Natara Branch in the release. "They are a fantastic ally in Houston’s efforts to serve its growing startup community and CodeLaunch is an incredible fit for the capstone of the 2022 Tech Rodeo. Finishing off Tech Rodeo with CodeLaunch's exciting atmosphere will be a highly anticipated event for the Houston innovation ecosystem after an engaging week of programming."

This Houston company created its own in-house tech infrastructure — led by Chris Quintanilla — to stay competitive within the alcohol distribution industry. Photo courtesy of Mexcor International

How this Houston-based alcohol importer, distributor uses tech to stay ahead of the curve

boozy innovation

You might say that Mexcor International, a Houston-based importer and distributor of wine, spirits, and other types of alcohol, relies on a single bottle of vodka rather than a case of vodka when it comes to its tech capabilities.

The annual tech budget for the 300-employee company, founded in 1989, falls well below $500,000. Mexcor International's annual revenue hovers around $300 million.

"We do have a decent size tech budget, but it's tiny in comparison to large distributors with multimillion-dollar tech budgets," says Chris Quintanilla, chief sales officer at Mexcor International.

The company leans on an IT director, an IT specialist, and an IT support company to handle tech needs. In other words, Mexcor International's in-house tech resources are minimal.

So, when the company's sales and administration sales team needed to step up its tech game, Quintanilla created a cloud-based software system combining customer relationship management (CRM) and enterprise resource planning (ERP) functions to churn out real-time reporting on inventory, deliveries, and other business matters. He took on the project equipped with IT knowledge he picked up online and at a three-day training session in Colorado, coupled with some simple tech tinkering.

On his own, Quintanilla has developed 46 dashboards that supply details about things such as wine and beer inventory, contacts for account managers, product catalogs, and key performance indicators (KPIs) for the sales team. About 230 employees, or roughly three-fourths of the company's workforce, can access these dashboards. Information on these dashboards can help employees answer myriad questions, such as "Which delivery trucks are arriving today?" or "What percentage of orders are being picked up tonight?"

Quintanilla says one of the key benefits of the dashboards is the ability to see how soon the company will run out of various products at its Texas, California, Florida, and Louisiana warehouses. This functionality enables the company to swiftly head off shortages. It has come in especially handy amid ongoing supply chain snags triggered by the COVID-19 pandemic, he says.

The dashboards also let Mexcor International track which customers' sales have risen or fallen compared with the same time a month or a year ago. With this information at their fingertips, salespeople can chat with customers about whether, for instance, they might like to substitute a brand of poorly selling tequila for another brand of tequila, according to Quintanilla.

In short, the innovation spearheaded by Quintanilla has helped propel Mexcor International well beyond the old days of pen and paper, photocopies, and faxes.

So, why are companies like Quintanilla's turning to in-house capabilities to push past the pen-and-paper approach?

"Companies that develop their own technology have more control over their strategic direction and can better respond to the needs of the market. This can mean a significant competitive advantage when a company develops a compulsory technology before the competition," technology and innovation strategist Evans Baiya wrote for AllBusiness.com.

In a 2020 survey by Boston Consulting Group, 46 percent of corporate executives around the world planned to invest more in their in-house tech capabilities.

"Every enterprise must re-evaluate the capabilities that it can develop in-house with the talent it has and determine which ones to procure from service providers," the consulting giant says. "By building capabilities in-house, companies can reduce the risk of their transformation projects stalling and turn to service providers in areas where they suffer from talent gaps."

At Mexcor International, Quintanilla has stepped in to fill much of the company's gap in tech talent.

Mexcor International established the new cloud-based CRM and ERP system in 2019. It replaced a clunky network-based setup hampered by unwieldy financial, sales, delivery, and routing modules.

"It was just so slow. You could not get the information you needed, and the network was always down," says Quintanilla, adding that the company's network-based system had sustained ransomware and malware attacks.

With the cloud-based system now in place, Mexcor International employees can perform an array of tasks via laptop, desktop, tablet, or smartphone, he says.

Quintanilla says in-house creation of this system aligns with Mexcor International's culture of "wearing multiple hats" to move the business forward, demanding in-house innovation on the tech front.

"If you want to see something happen, you have to grab the bull by the horns and do it yourself," he says. "We are a medium-sized company. We just hired a true IT person in the last two or three years. We don't have million-dollar budgets for big IT departments. We kind of figure it out as we go."

The lab will launch virtually first, before moving into a physical space early next year. Photo via Getty Images

Houston software company to launch innovation lab for enterprise startups

new to hou

A Houston-based global software development company has teamed up to create an innovation lab that will launch virtually before moving into a physical space early next year.

Softeq Development Corporation announced the creation of the Softeq Innovation Lab in partnership with the Massachusetts Institute of Technology's Integrated Design and Management program and Massachusetts-based Boundless Technology. The lab is directed at helping enterprise companies collaborate on the technologies of tomorrow, according to a news release.

"At the Softeq Innovation Lab, we recognize the importance of developing an incubator that goes beyond innovation theatre and are rolling up our sleeves to achieve transformative disruption in enterprise companies," says Christopher A. Howard, Softeq founder and CEO, in the release.

"The first wave of disruption was based in Silicon Valley," he continues. "The second wave of disruption is occurring in industries central to Houston's economy such as energy, health care, and financial services. With technology rewriting the playbooks for these industries, Houston is the perfect venue for our Innovation Lab to enable companies to thrive in this new age of disruption."

First up for the lab is a series of Boundless Bootcamps, which aims to connect participants to corporate disruptors, including David Rose of Warby Parker and MIT Media Lab.

"The city of Houston is at the center of a powerful convergence between industry, innovation and proven intrapreneurs," says Chuck Goldman, principal at Boundless Technology, in the release. "The Softeq Innovation Lab brings together entrepreneurs, corporations and 20X innovators who have achieved ROI of at least 20X and built billion-dollar businesses."

In addition to having access to MIT, Boundless, and Softeq's global networks, the participants will also receive an MIT IDM Certification from the nation's top engineering, design, and business program.

"I'm thrilled to bring our leadership and human-centered design program to Houston to help intrapreneurs drive breakthrough growth in leading organizations" says Matt Kressy, founding director MIT IDM, in the release.

For additional information or to find out more about how to get involved please visit the Softeq Innovation Lab's website.

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Uber, Nuro and Lucid plan to roll out robotaxi services in Houston

autonomous autos

More autonomous vehicles are expected to hit the roads in Houston next year.

Ridesharing giant Uber announced that it plans to roll out its premium robotaxi service in the Bayou City in mid-2027. Houston will be Uber’s second planned market for the program, following the San Francisco Bay Area, where the program is expected to be rolled out later this year.

Uber, Nuro and Lucid Group will bring the robotaxi program to Houston with more markets planned for the future. Currently, Nuro is conducting autonomous on-road testing with safety operators in Houston. Testing includes simulation, closed-course testing and supervised public-road testing.

“Houston is a city Nuro knows well, and we’re excited to help bring this robotaxi service to the city through our partnership with Uber and Lucid,” Andrew Chapin, chief operating officer at Nuro, said in a news release. “Houston’s large, complex metro area is an ideal market for demonstrating how Nuro’s universal autonomy platform can generalize across different geographies and operating environments. We look forward to continued engagement with the community as we prepare to launch service in 2027.”

The fleet of 100 vehicles across California and Texas will feature Lucid Gravity EVs and future Lucid Midsize vehicles equipped with Nuro Driver technology, Nuro’s Level 4 universal autonomy platform, plus a redundant sensor suite with cameras, lidar, radar and a roof-mounted halo.

The vehicles will be owned and operated by Uber and its fleet partners and made available to riders through the Uber network, according to the company.

In addition to the fleet of autonomous vehicles, Uber also announced that it has secured a 50,000-square-foot depot facility and dedicated charging pitstop in Houston. The facility will allow Uber and its partners to control vehicle maintenance, repairs, charging, cleaning, and day-to-day operations.

“Houston marks an important next step in our partnership with Lucid and Nuro as we expand autonomous mobility to more riders throughout the world,” Sarfraz Maredia, global head of autonomous mobility & delivery at Uber, added in the release. “Together, we’re combining best-in-class vehicle and autonomy technology with Uber’s scale, fleet operations expertise, and infrastructure capabilities to build a service that can grow across dozens of markets in the years ahead.”

Waymo launched its autonomous vehicle program in Houston in February.

The company later suspended its driverless car services in Houston, other major Texas cities, and Atlanta, after one of its vehicles was stranded by flooding during heavy rains. However, according to the Houston Chronicle, the fleet has resumed activity in Houston and is fully active.

Houston fintech company closes $7M funding round

fintech funding

Houston-based fintech company Receipts Depositary Corporation has closed a $7 million oversubscribed funding round and plans to scale.

The round was led by Austin-based LiveOak Ventures, with participation from Hivemind Capital, Onigiri Capital, OTC Markets Group, GTS, and Redbeard Ventures, according to a release from RDC.

RDC's platform issues depositary receipts (DRs) to qualified investors on digital and alternative assets, making it easier for investors to buy and trade hard-to-access and less traditional assets. Currently, the company offers DRs for cryptocurrencies including Bitcoin, Ethereum, Solana and XRP.

RDC says the new funding will allow it to launch new DR products across a wider range of asset categories, potentially including commodities. Additionally, it plans to grow its relationships with "banks, broker-dealers, market makers, custodians and exchange partners" and add to its product, operations, technology, and commercial functions teams. The company is actively hiring, according to a press release.

“Depositary Receipts are trusted, regulated capital markets products which RDC is bringing to an entirely new universe of assets, from commodities to digital assets, that have historically been out of reach of traditional securities markets," Krishna Srinivasan, founding partner at LiveOak Ventures, said the release. “The team's depth of experience in the DR business on a global scale, combined with the broad institutional validation from co-investors, anchor customers, and strategic partners across asset classes, makes RDC uniquely positioned to define this category. We're proud to lead this round and support the company as it scales.”

RDC was founded in 2022 by three Citibank alumni: CEO Ankit Mehta, CEO Bryant Kim and COO Ishaan Narain. It began offering its first DRs for Bitcoin in 2024.

“This funding round is a strong validation of what we’re building at RDC and the growing demand for modernized Depositary Receipt infrastructure,” Mehta added in the release. “With the support of LiveOak Ventures and our investor partners, we are accelerating development across our DR platform expanding our market reach, and building the team needed to support the next generation of DR product

Houston space co. adds local colleges to university alliance

space schools

Houston’s Axiom Space has added 26 new members to its University Alliance—including two from Houston—to support the next generation of space exploration.

Engineers, researchers and students from the partnering universities will be dedicated to advancing microgravity research, technology development and commercial innovation in low-Earth orbit.

Rice University and the University of Houston are among the new colleges to join the alliance, which launched with 15 members last year. The University of Texas at Austin and the University of Texas at El Paso have also joined, in addition to international institutions in Europe, Asia and Australia, and others from around the U.S. See full list here.

“Through the University Alliance, Axiom Space is uniting the international research community driven to enable human progress,” Lucie Low, Axiom Space chief science officer, said in a news release. “Together, alliance members are taking the initiative to ensure microgravity research benefits everyone on Earth and our shared goals fulfill a scientific purpose to advance civilization.”

Axiom is building the world’s first commercial space station, known as Axiom Station. The University Alliance “will support and advance space science during the transition from government-led to commercially owned and operated space stations,” the company said in a release. Partnering universities will contribute to the research community by participating in international collaborative scientific initiatives, identifying future research, and bolstering strategic positions in the commercial orbit research field.

Recently, the Rice Space Institute was also selected to lead the U.S. Space Force Strategic Institute 4 in addition to other space-centric partnerships.

“We’re excited to bring our expertise to this global alliance and to benefit from the deep expertise of our partners,” David Alexander, professor of physics and astronomy and director of the Rice Space Institute, said in a news release. “Space is truly a collaborative and global endeavor. Alliances like these are key to progress.”

UH and NASA’s Johnson Space Center expanded their collaboration in 2022. In 2024, UH launched its NASA MIRO Inflatable Deployable Environments and Adaptive Space Systems Center (IDEAS2) via a five-year, $5 million grant.

“As a major public research university located in Space City, the University of Houston has a unique opportunity and responsibility to help lead the future of space innovation, and our participation in Axiom Space’s University Alliance represents a major step forward in that mission,” Karolos Grigoriadis, the Hugh Roy and Lillie Cranz Cullen Endowed Professor and chair of mechanical and aerospace engineering at UH, added in a separate release.

Meanwhile, Axiom recently tacked on an additional $175 million to a previously announced capital raise, bringing the oversubscribed round to a total of more than $525 million. It also has announced plans to launch Swiss and Japanese subsidiaries.