How CDK Cost Dealers a Billion…

June 19 last year was a dark day for one of the largest software providers in the automotive retail industry in the U.S. On that day, everything at CDK came to a standstill. Criminals managed to breach the systems, lock everything down, and effectively hold the company hostage.

Due to the system blockade, more than ten thousand dealers and automotive businesses suddenly lost access to their DMS. They could no longer reach their customers, issue invoices, or access leads and other data. Everything went dark.

It wasn’t just CDK and the affected dealerships that had an immediate problem—every software provider that relied on CDK’s dealer data to deliver services was also impacted. Suddenly, everything was gone…

Hyundai Dealer

A large Hyundai dealer, who was prepared for such a disaster scenario, immediately decided to switch to manual operations. They reverted to handwritten orders and financing contracts. (Can you imagine submitting those orders to the bank?) In total, they processed around 2,400 orders entirely by hand. Other dealers were forced to close their doors because they couldn’t do anything… Others simply bought new computers, printers, and a new DMS system to start over the next day. All of this happened because criminals managed to take a main database hostage.

And CDK?

And CDK? They ‘bought back’ their passwords for just 25 million euros—a mere fraction, in my opinion, given that the damage to dealers alone is estimated at over a billion euros. Fortunately, this happened across the ocean and not here, but it does make you think. What if we were hit by an attack on one of the major DMS systems? How dependent are we? How would we move forward? Should you prepare your business for such a horror scenario, or should you assume that the systems we use are well secured? You tell me. Either way, it’s food for thought—and a guaranteed headache, no matter which stance you take.