It's been called the largest IT outage in history because of its global impact.
The cause was a defect in an update delivered for Microsoft Windows by cyber security company CrowdStrike.
It was a fault in what the company calls its Falcon Sensor software which is installed on computers to gather security data.
Because CrowdStrike has such a significant share of the global market, the outage ended up affecting millions of computer systems around the world.
Individual users were confronted with what's known as the "Blue Screen of Death" and banks, hospitals and airlines were badly affected.
CrowdStrike CEO George Kurtz appeared on the US Today Show and offered an apology.
“We're deeply sorry for the impact that we've caused to customers, to travellers, to anyone affected by this including our companies. So, the system was sent an update and that update had a software bug in it and caused an issue with the Microsoft operating system. And we identified this very quickly and remediated the issue and as systems come back online as they're rebooted, they're coming up and they're working and now we are working with each and every customer to make sure that we can bring them back online."
Pre-market trading in the U-S suggested CrowdStrike had lost a fifth of its value - which could mean a loss of billions of dollars in its valuation.
Last night, the federal government called an emergency meeting with industry representatives including Qantas, Virgin Australia, the major supermarkets, Telstra and Optus and CrowdStrike.
After the meeting, the Deputy Secretary from the Home Affairs Cyber and Infrastructure Security Centre, Hamish Hansford, encouraged people not to panic.
"Over the next hours and days, we hope that this incident will self-resolve and technical responses kick in. There is no reason to panic. CrowdStrike are on it. It is not a cyber security incident, and we are working as fast as we can to resolve the incident."
Police in New South Wales say triple zero emergency calls continued to work but some police information distribution systems have been impacted and it was a similar situation for the police in Victoria.
Airports all over the world have been badly affected with some passengers unable to board their flights.
Jetstar had to cancel all its flights in Australia and New Zealand on Friday night which left thousands of its customers unable to fly out for the weekend.
Its IT systems started to operate again today with the airline saying it planned to operate its scheduled flights.
Virgin Australia grounded its flights at 5pm but resumed boarding an hour later.
In the United States, the problem was so bad that American Airlines, United and Delta asked the Federal Aviation Administration for a ground stop which means no flights are allowed to take-off.
Passenger Matt Jordan ended up getting stuck at an airport and says it was chaotic for both passengers and airline staff.
"They actually mentioned at the gate that their rebooking systems were down, their hotel systems were down, their ability to get bags off the plane were down. And even the computer system that the airport uses to open the parking garages was down. So literally everyone is kind of stuck here because there's no way to get in or out."
In London, Heathrow suspended all flights to the United States while Berlin Airport cancelled all its flights.
Global aviation data firm Cirium suggests at least 5,000 flights were cancelled globally.
As computer systems are being restored, Home Affairs Minister Clare O'Neil wants Australians to be wary of scam artists who will try to exploit the outage with scam phone calls and phishing emails.
"So, what we are seeing some reporting of, is attempts to conduct phishing through the incident that's just occurred. So, if I could just explain what that means, what we are hearing is that some small businesses, in particular, some individuals, are receiving emails from people who are pretending to be CrowdStrike or who are pretending to be Microsoft and are indicating that you need to put in bank details to get access to a reboot, you need to pay money, that you need to put your personal details in so that your systems can be brought back online. Could I ask all Australians to be really cautious over the next few days about attempts to use this for scamming or phishing."
