No matter how much painstaking testing engineers conduct or how many sleepless nights developers spend coding until dawn, a single bug can still cause a complete system failure. From software glitches that cost billions to critical bugs leading to fatal accidents, the consequences of poor software development can be catastrophic.
Did you know that poor software quality costs US businesses approximately $2 trillion annually, with operational software failures being the primary contributor to these losses?
Some of the most common reasons behind software failures include:
- Inadequate architectural definition and poor low-level design.
- Unrealistic schedules or milestone deadlines set without sufficient data and analysis.
- Failure to anticipate and accommodate evolving requirements.
- Overloading projects with excessive personnel in an attempt to compress timelines.
- Intuition-based or emotionally driven stakeholder negotiations.
- Miscommunication, conflicting egos, and negative team dynamics.
Following are the major software failures that led to embarrassment and massive financial loss. In extreme cases, software errors have even cost lives, such as the Therac-25 radiation overdose incidents.
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13. MOVEit Data Breach
In May 2023, a substantial data breach occurred involving MOVEit, a managed file transfer software developed by Progress Software. This flaw allowed unauthorized access to sensitive data, leading to a series of cyberattacks affecting thousands of companies worldwide.
Reason for failure: SQL injection vulnerability
The breach was primarily executed through SQL injection attacks on public-facing servers, enabling attackers to exfiltrate data without detection. More specifically, the flaw enabled attackers to deploy a web shell, referred to as “LemurLoot,” which facilitated unauthorized access to and theft of sensitive data stored in the MOVEit databases.
Total cost of breach: $15.8 billion
The breach affected more than 2,700 organizations worldwide and compromised the personal data of approximately 95.8 million individuals. According to IBM’s data breach cost analysis, the average cost per compromised record is $165.
12. British Passport System (1999)
In 1999, the UK Passport Agency introduced a new computerized processing system to streamline passport applications. Developed by Siemens, the system was intended to modernize the process and improve efficiency. However, due to software glitches and system failures, the rollout caused massive delays, leaving thousands of UK citizens unable to get their passports in time for travel.
Reason behind failure: Inadequate testing
The system was not properly tested under real-world conditions, leading to bottlenecks when it was deployed. Plus, the UK government introduced new passport requirements for children around the same time, substantially increasing the volume of applications—something the system was not prepared to handle.
Total cost of the error: $20 million
The failure forced the UK government to hire extra staff, work overtime, and compensate affected citizens, resulting in an estimated $20 million in financial losses. Furthermore, thousands of people missed their vacations and business trips, adding to the public outrage.
11. Mariner 1
Atlas Agena with Mariner 1 | Image credit: Wikimedia
Launched in July 1962, Mariner 1 was NASA’s first interplanetary mission, intended to fly by Venus and transmit scientific data back to Earth. Unfortunately, the mission ended prematurely when the spacecraft was destroyed 293 seconds after liftoff due to a guidance system malfunction.
Reason behind failure: A Missing Overbar
Shortly after liftoff, the rocket began to veer off course. This deviation was caused by a flaw in the guidance software. Specifically, a missing overbar (a symbol indicating an average value) in the handwritten guidance equations led to incorrect guidance commands being sent to the rocket. Consequently, the rocket veered off course, and the range safety officer ordered its destruction to prevent potential hazards.
Total cost of the error: $18.5 million
The loss of Mariner 1 resulted in an estimated financial setback of $18.5 million in 1962, equivalent to approximately $194 million today.
10. Mydoom
First detected on January 26, 2004, Mydoom is one of the most infamous and damaging computer worms ever created. It spread via email attachments and peer-to-peer networks, infecting millions of computers worldwide. At its peak, Mydoom accounted for nearly 8.3% of all emails sent globally, making it the fastest-spreading email worm in history.
Reason behind the attack: Unknown
While the exact origin of Mydoom remains unknown, some theories suggest it was created by a group hired to attack SCO Group, which was involved in legal disputes over Linux software at the time. Unlike many other worms, Mydoom didn’t appear to have a financial motive.
Total cost: Between $38 billion and $50 billion
The outbreak resulted in billions of dollars in damages, including security costs, lost productivity, and mitigation efforts. Estimates suggest the total financial impact was between $38 billion and $50 billion globally.
9. Hartford Coliseum Collapse
Image source: Wikispaces
On January 18, 1978, the roof of the Hartford Civic Center Coliseum in Hartford, Connecticut, collapsed due to structural failure. The 10,000-ton roof fell onto the arena’s seating area, just six hours after hosting a basketball game with over 4,700 spectators. Thankfully, no one was inside at the time.
Reason behind failure: Flawed CAD calculations & structural design errors
Investigations revealed that the collapse was a combination of engineering miscalculations and computer software errors used in the structural design process. Engineers used early computer software to model stress distribution, but the software failed to account for certain load conditions, leading to underestimated stress levels on key joints.
The truss system had inadequate diagonal bracing, causing excessive bending stress. The weight of accumulating snow and ice (from a winter storm) pushed the structure beyond its limits.
Total Cost: $70 million
The collapse damaged public trust in computer-aided engineering and led to stricter building code regulations. Plus, major lawsuits were filed against the design firm, insurers, and contractors.
8. Mars Climate Orbiter
Mars Climate Orbiter was a robotic space probe launched by NASA in 1998 to study the Martian atmosphere, climate, and surface change. After 286 days of launch, the spacecraft burned up in Mars’ atmosphere instead of entering orbit as planned.
Reason behind failure: Unit conversion error
The failure occurred due to a simple but catastrophic unit conversion error between two NASA teams: Lockheed Martin (the contractor building the spacecraft), which used imperial units for force calculations, and NASA’s Jet Propulsion Laboratory, which controlled the mission, expecting metric units.
Since these units were never properly converted, the Orbiter’s navigation system miscalculated its trajectory, causing it to enter Mars’ atmosphere at 35 miles instead of the intended 140 miles. The low altitude led to aerodynamic forces destroying the probe.
Total Cost: $327 million
The mission’s total cost was approximately $327.6 million, which included spacecraft development, launch expenses, and mission operations.
7. IRS: Lack of Fraud Detection System
In 1994, the Internal Revenue System (IRS) introduced the Electronic Fraud Detection System (EFDS) to detect and prevent fraudulent tax returns. Over time, the EFDS became outdated and struggled to keep pace with evolving fraud tactics. Recognizing these drawbacks, the IRS started working on the Return Review Program (RRP) in 2009, aiming to improve fraud detection capabilities and replace the EFDS.
Reason behind failure: Implementation delays
The RRP faced delays and was not fully operational as intended. As a result, during the 2006 filing season, the IRS operated without a comprehensive upfront fraud detection system, leaving the tax system vulnerable to exploitation.
Total Cost: $4 billion+
In 2012, identity theft-related tax fraud resulted in approximately $4 billion in fraudulent refunds. By 2013, tax identity theft had impacted 770,000 taxpayers.
6. Cluster Spacecraft
The Cluster Mission was a European Space Agency project comprising four identical spacecraft developed to study Earth’s magnetosphere. These satellites were intended to be launched aboard the first flight of the Ariane 5 rocket on June 4, 1996. However, just 37 seconds after liftoff, the rocket exploded mid-air, destroying all four satellites.
Reason behind the failure: Integer overflow frror
The Ariane 5 rocket used software originally designed for the Ariane 4, but its faster acceleration was not accounted for in the code. As a result, the software attempted to convert a 64-bit floating-point number into a 16-bit integer. Due to Ariane 5’s higher acceleration, the value exceeded the storage limit, causing a system crash.
Total cost of the error: $370 million
The destruction of the Cluster spacecraft resulted in a financial loss exceeding $370 million. This figure includes the development and launch of all four spacecraft. Beyond the monetary impact, the failure delayed critical scientific research into Earth’s magnetosphere.
5. Pentium’s Long Division
In 1994, a critical flaw was discovered in Intel’s Pentium microprocessor, causing errors in floating-point division calculations. The bug, later known as the Pentium FDIV bug, resulted in incorrect decimal results for certain division operations. This lead to widespread concern among researchers and businesses relying on precise calculations.
There were around 5 million defected chips in circulation and Intel eventually decided to replace all chips for anyone who complained. Later, Intel turned some of their faulty processors into key chains.
Reason behind the failure: Flawed division algorithm in the Floating-Point Unit
The bug was caused by a missing lookup table entry in the chip’s hardware-based division algorithm. Certain floating-point divisions returned incorrect results beyond the 8th decimal place.
However, the error was rare, occurring only once in approximately nine billion random floating-point divisions. For example, dividing 4,195,835.0 by 3,145,727.0 resulted in 1.333739068902037589 instead of the correct 1.333820449136241002—an error of 0.006%.
Estimated loss: $475 million
Intel incurred losses of $475 million due to the recall and replacement of defective chips. Plus, the incident severely damaged the company’s reputation, prompting Intel to adopt greater transparency in future processor designs.
4. Wall Street Crash 1987
On October 19, 1987 (also known as Black Monday), the Dow Jones Industrial Average (DJIA) fell 508 points, losing 22.61% of its total value, and the S&P 500 dropped 20.4%. This was the greatest loss Wall Street ever saw in one day.
Reason behind the crash: Automated trading algorithms
Large institutional investors used program trading systems to sell stocks when markets declined, accelerating the crash. These systems didn’t account for panic-driven market conditions, causing a self-reinforcing feedback loop of selling.
Several firms used portfolio insurance, an algorithmic strategy that sold futures contracts to hedge against losses.
As the market declined, these algorithms triggered even more selling, worsening the downward spiral.
Worldwide losses were estimated at $1.71 trillion
While the immediate economic impact was less severe than initially feared, the crash led to increased market volatility and prompted regulatory changes to prevent future occurrences.
3. Y2K
The Y2K bug, also known as the Millennium Bug, arose due to how dates were stored in older systems. Many legacy computer programs represented years using two digits (for example, “99” for 1999) instead of four digits (“1999”).
As the year 2000 approached, concerns grew that computers would interpret “00” as 1900 instead of 2000, causing incorrect calculations and potential economic disruptions across industries like banking, healthcare, and aviation.
Reason behind the flow: Limited memory in early computing
Older computers were designed with minimal memory and storage, so programmers used two-digit years to save space. This short-sighted design choice became a massive issue decades later.
Total cost of the fix: $300 billion
Estimates suggest that efforts to fix the issue cost over $300 billion globally. The United States alone spent approximately $100 billion on Y2K preparedness. These investments covered software updates, system replacements, testing, and contingency planning.
2. Cancer Treatment and Deadly Radiation Therapy
Therac-25 was a computer-controlled radiation therapy machine developed by Atomic Energy of Canada Limited (AECL) to treat cancer. Between 1985 and 1987, the device delivered massive radiation overdoses to at least six patients. These patients received radiation doses 100 times the intended level, exposing them to deadly radiation burns and severe tissue damage.
The cause: Race Condition in the software
The Therac-25 relied entirely on software for safety, but a bug in the code allowed hazardous conditions to occur. The device had two modes: low-power X-ray mode and high-power electron beam mode. If a technician quickly changed modes before the device started treatment, a race condition in the software could leave the attenuator out of place, enabling a deadly electron beam to hit patients directly.
Total Cost: 3 lives
At least three patients died from radiation overdoses, while others suffered lifelong injuries, including severe burns, amputations, and organ damage. Multiple lawsuits were filed against AECL, resulting in financial settlements.
1. Patriot Missile Failure
In February 1991 (during the first Gulf War), an American Patriot Missile system in Dharan, Saudi Arabia, failed to intercept and track an incoming Iraqi Scud missile. The Scud crashed into American Army barracks.
Reason for failure: Accumulated Timing Error Due to Floating-Point Precision
The Patriot missile system relied on a 24-bit floating-point register to track time. However, an accumulated rounding error caused its internal clock to drift by 0.34 seconds after running continuously for over 100 hours. Since a Scud missile travels at about 1,676 meters per second, this tiny timing error caused the radar to miscalculate the missile’s position by about 600 meters, leading to the failed interception.
Impact: 28 soldiers killed and 100 injured
The impact killed 28 American soldiers and injured about 100 others, making it one of the deadliest attacks on US forces during the war.
Other Notable Software Failures
Microsoft customers accused of pirating: Someone from the Windows team accidentally installed bugged-filled pre-production software on all Windows servers. For the next 19 hours, all genuine XP users were told they were running pirated software.
Criminals on Parole: In 2011, around 450 violent criminals were released from California county prison due to a small mistake in computer program code.
World War III (almost happened): The Soviet Union’s nuclear early warning system reported the launch of American missiles on 26 September 1983. The Soviet systems mistakenly picked up sunlight reflections off cloud tops and interpreted them as missile launches.
Later, the missile attack warnings were identified as a false alarm by an officer of the Soviet Air Defense Forces. This decision prevented a nuclear war and the potential deaths of millions of people.
The blackout: Darkness spread throughout 8 U.S. states, affecting 50 million people in 2003. The problem was a race condition caused by two separate threads of a single operation using the same element of the code.
Apple Map Fails: With the release of iOS 6, Apple decided to abandon the superior Google Maps platform. Unfortunately, this turned out to be one of the most epic failures of the mobile computing industry. In September 2012, TPMIdeaLab realized that the software was missing entries for entire towns, incorrectly placed locations, satellite imagery obscured by clouds, and more.
LAX Flights Grounded: In 2007, tons of incorrect data was sent out on the U.S. border and Custom Control Network. This led to the LAX airport shutting the entire place down for 8 hours—more than 17,000 planes were grounded until they resolved the issue. The culprit was a single piece of faulty embedded software.
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