Security: The Impact of Data Loss on Businesses

As the use of laptops, smart phones and other mobile devices increases, so too do the number of incidents involving the loss of those devices and the data stored on them.   The DataLossDB website tracks data loss incidents.  It reports multiple incidents on a daily basis, but it is likely that this is only a small fraction of the actual total number of incidents which have occurred.

A recent report by Cibecs, a data management and protection company, found that more than 50 percent of companies have experienced some sort of “endpoint data loss “over the last year, a number which actually seems a bit low, but the estimate closely matches the results from another survey of small businesses released in April from Carbonite which found that 48 percent of businesses have experienced data loss.  And a report by the Ponemon Institute on behalf of Checkpoint found that globally data loss problems have struck 77 percent of organizations.

In 2009, a report done by Ponemon Institute on behalf of Intel estimated that the cost of a lost laptop is about $50,000.  That seems high, but they have factored into that number costs related to replacement, detection, forensics, data breach, lost intellectual property, lost productivity and legal, consulting and regulatory expenses.  The total costs varies when tracked by the position of the user.  Replacing a senior executive’s laptop costs around $28,000, while costs associated with that of a laptop lost from a manager exceeded $60,000.

The Cibecs report specifically focuses on “Endpoint data protection” which refers to the protection of sensitive information on stored on endpoint hardware, like laptops, desktops, servers and mobile devices, and it attempts to minimize any costs associated with data breaches or data losses directly attributed to these endpoints.  The Cibecs report corroborated the high cost involved with replacement of a laptop estimated in the Intel report — Cibecs found that 30 percent of organizations agreed that replacement costs for a single lost laptop exceed $25,000.

The Checkpoint report quantifies the types of sensitive data which is being lost.  55 percent incidents involved lost customer data.  44 percent involved customer information.  Intellectual property was lost in 33 percent of the cases, and employee information was lost in 31 percent.

The Cibecs report found that increased mobility of workers is the primary reason leading to increasing data loss.  More than 60 percent of companies say that the majority of workers are now  using laptops as their primary computer system.  The use of mobile devices increases the risk of data loss, cyber security threats and unauthorized access to company data.  (An interesting related fact noted by the Cibecs reports is that a side-effect of increased mobility is significantly higher data bandwidth and storage volumes — 67 percent of companies have reported much higher costs in these areas.)