US LOST DIGITAL DATA COSTS BUSINESSES BILLIONS http://www.usatoday.com/tech/news/computersecurity/2006-06-11-lost-data_x.htm?POE=TECISVA

At first, Joan Horbiak just kept working. Then it became impossible. She could no longer access files on her computer. The screen was seizing up. Data she had just put into her laptop were vanishing like water through a sieve.

Horbiak's computer was crashing. A malfunctioning fan caused her hard drive to burn, and the communications consultant in Alexandria, Va., lost everything. Presentations. Personal files. E-mail.

"I was in a flood three years ago and lost my car, and this was scarier," Horbiak says. "It was very dramatic. I lost almost everything."

It took her three days and more than $6,500 in payments to computer data recovery experts to restore what she could.

Horbiak's story illustrates a growing risk of doing business in today's increasingly wired world.

Computers have become ubiquitous in business. The rise in the use of laptops means a greater chance for malfunctions, theft and loss. Laptops also are more likely to lose data due to accidental damage, such as dropping.

Secondly, more data are being stored in smaller spaces as hard drive capacity increases, according to a 2003 study at the Graziadio School of Business and Management at Pepperdine University in Los Angeles. That means that an enormous amount of business data can be stored on a single laptop.

For example, personal data on 26.5 million veterans and some of their spouses were contained on a computer laptop and disks stolen last month from the home of a Veterans Affairs data analyst in Maryland.

The Pepperdine study remains relevant today, says author David Smith, an associate economics professor at the university, and the cost to businesses is also up.

"(The problem) is growing, because individuals are relying on data so much more," Smith says. "There are backup systems, but people don't use them enough. Hard drives fail all the time."

Consider the statistics:

• Data loss costs U.S. businesses more than $18 billion a year, according to the Pepperdine study. That 2003 study is the most recent estimate available, but Smith says the number is probably much higher today.

• About 70% of business people have experienced data loss due to accidental deletion, disk or system failure, viruses, fire or some other disaster, according to a May survey by Boston-based Carbonite, which provides online backup services to consumers.

• Another recent survey by Symantec, a software maker, found that 90% of users store personal information on their computer. However, only 57% back up their data.

• The first reaction of employees who lose their data is to try to recover the lost document themselves by using recovery software or either restarting or unplugging theircomputer — steps that can make later data recovery impossible, according to a 2005 global survey by Minneapolis-based Ontrack Data Recovery.

Safeguarding data can be as easy as backing up information to a CD, DVD or external hard drive or using an online backup service that charges for the protection.

It's also vital, Smith says, to set up a regular backup schedule. Employees who use laptops may be able to retrieve data that the company has backed up, but personal information can still be lost.
Alison Lewis, 63, of Hayward, Calif., was working as treasurer for her local library when her computer crashed, taking with it all the library's financial records.

"I had not been saving any of it," Lewis says. "I had to re-input all the existing information. I was so depressed. I couldn't open anything. It gave me the blue screen of death."

The average life expectancy for a hard drive is three to five years, says Michelle Zuzow at ADR American Data Recovery.

"It's not a matter of if, it's when," Zuzow says, adding that data recovery can take three to five days and cost more than $1,000. Most of ADR's clients are businesses that have lost critical data. "Some have no backup in place."

Theft is a major concern

While the majority of data loss happens as a result of a hard drive failing, theft is also a major concern — especially as more companies move to laptops instead of desktop PCs.

Nearly 90% of computer users who had their laptops stolen said the device contained company communications, as well as confidential business and personal information, according to a 2005 survey by Credant Technologies, a security software provider in Addison, Texas.

That's what happened to Dave Remtema, 45, a marketing consultant in Grand Rapids, Mich., who shares an office with five other business owners. On a Friday night, he worked late and returned the next day to find that his computer — and those of his fellow renters — was gone. The operation had no backup, but he had backed up information in several different ways and was able to retrieve the data. Still, it took 10 hours to get back in business again.

"I had to reload everything," he says, "and buy a new computer."