The most common reasons for data loss:
Hardware or system failure Human Error Disaster prevention and recovery plans are often overlooked or outdated	Software corruption Natural disasters Most backup tools and techniques are not 100% reliable

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Cost/Benefit Analysis of Remote Backup vs. In-House Backup for Small and Medium Businesses

The key challenge surrounding data backup activity at SMBs is that if there are existing backup processes in place, they usually don't get done regularly and/or are performed in a way that does not fully protect the organization. Proper backups are done automatically, at non-peak business hours, are securely encrypted, are available for restore at any time, and are taken offsite every night.

The time and processes spent verifying that in-house backups were successful and are restorable is also a critical component in any backup plan. The worst time to discover that your backups are not current, are incomplete, or are corrupted, is when you really need them.

Costs for proper in-house SMB data backup include:

Employee time - backing up: (daily) ½ - 1 hour

Backup Media: $2 - $200, depending on format

Hardware: $200 to $8000 depending on format

Employee time - verifying backups: (weekly) 1 hour

Employee time swapping media: (daily) .25 hours+

Assuming that the employee responsible for the backups is on a salary of at least $30,000 per year, and using the minimum times outlined above, the cost of properly backing up an SMBs data is about $71.25 per week, $285 per month, and $3420 per year not including hardware or backup software.

Compare this to our Remote Backup service, operating automatically at non-peak hours, and without imposing on your existing staff or adding hardware or media resources of any type. Typical charges for our Remote Backup service start around $50-$75 per month, resulting in a minimum cost savings of between $2520 and $2820 per year.

If an SMB is currently doing its own backups in accordance with the guidelines outlined above (and most aren't), they are already spending over three times the cost of our automated, encrypted, and offsite Remote Backup service.

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The following is an exerpt from Windows IT Pro Magazine

Insurance agency rescues customer data from Hurricane Charley

"Our agency worked 12 days straight taking about 2000 claims after Hurricane Charley. It was organized chaos around here. There were people everywhere in this office, employees running around in shorts and sweating bullets, and clients passing out from the heat. But despite all this, we had our data. We heard horror stories of other agencies whose offices were destroyed, and their service reps were out on the street in the hot sun writing claims by hand."

In the aftermath of a hurricane, all hope for riding out a disaster lies in how quickly your organization can regain access to business data. The agency's continued existence depended on whether its data- and business-recovery strategies worked as planned when Hurricane Charley roared up Florida's southwest coast. Not only was the agency within striking distance of the hurricane, which made landfall about 10 miles from its main office, about 12 percent of the firm's 17,000 customers were in the direct-hit area and sustained catastrophic property damage. Protecting and restoring data with minimal interruption to business operations is the ultimate goal of any recovery strategy. In a recent interview with a Windows IT Pro Magazine senior editor, the agency's manager discusses how a cost-effective backup and recovery plan geared toward the needs and limited resources of a small-to-midsized business (SMB) enabled Key Agency to resume operations and start processing customer claims on site less than 24 hours after the hurricane hit.

Q. Unlike the areas affected by the December 2004 tsunami, you had adequate early warning about Hurricane Charley. What was your timeline for preparing for the hurricane?

A. We started preparing on Thursday, August 12, the day before Charley struck, when we knew it was on its way up here. We powered down all our servers around 2:20 p.m., then covered them with plastic and placed them on old insurance manuals to lift them in case of flooding. Then everybody went home to hunker down. About 24 hours later, on Friday afternoon, August 13, the hurricane came ashore near Port Charlotte, where many of our insured customers are located. We're always wondering, when is the big one going to hit? And it did.

The agency owner called me at home at about 9:30 p.m. He'd been out already and told me that the main office and branch office (in North Port) were both fine, but the main office had no power. The branch-office server is in the main office, along with our main server, a fax server, and a backup server, all on Windows 2000 Server. So I'm thinking, "Okay, I don't have computers, I don't know how long it will be 'til I get computers because I don't know how long we'll be without power. All I know is, we're going to be completely swamped with claims, starting Saturday morning."

Shortly after I spoke with the agency owner, at about 9:50 p.m. I made a call to our offsite backup service, which provides a remote backup by copying our data via the Internet .

We started downloading our backed-up data around midnight. The download took about 3 hours. I arrived at the main office--which was dark and hot--about 7:45 Saturday morning. Our employees were starting to drift in. I got a call on my cell phone to say that my data was up and ready to go. Right after I hung up from that phone call, the first customer walked in the door to make a claim. He had lost everything; his entire house was just gone.

Q. Did the agency have a plan for continuing operations during a power outage?

A. We have diesel generators in the building to power the servers during an outage. In addition, the agency owners have motor homes, which also have generators, so our plan was, if necessary, to operate the business out of the motor homes and access the data there via laptops. But a funny thing happened. No sooner had we plugged in the generators and were ready to get our computers going again, when our power was restored! It was a good drill, though, because we found that our backup and restore plan worked. When we came in that morning, no matter what else happened, our data was available both to the branch office and to us.

We still do a manual tape backup daily and keep the backup tapes in a fireproof safe on site. Before the hurricane, I passed out copies of all the tapes to the different department heads. We also printed reports that we could have worked from, but they were run at the beginning of hurricane season in July, and the data was incomplete. Restoring the data from tape or using the reports to manually write claims would have taken much longer than restoring data and downloading it into claim forms through our offsite service. It would have been like looking for a needle in a haystack, trying to find the right data.

Q. It sounds as if being able to restore data and business operations so quickly gave the agency an edge over other agencies in serving customers after the hurricane.

A. Right. It all comes down to having that data available. If you have your data, you can work. Until you file that claim, nothing's going to happen; you can't help the customer. When you have a major disaster with so many people filing claims, you're either standing in line behind 20 claims or behind 20,000. Your customers will be even more upset if their claim is put off yet another couple of months because there aren't enough adjusters. Restoring our data and operations quickly allowed our customers' claims to be processed fast, compared with the people who were out taking claims by hand, then driving to someone's house and faxing them.

Q. Did you reevaluate your disaster recovery plan or storage needs after Hurricane Charley?

A. Actually, I started keeping a folder, which I called the Charley folder, which turned into the Charley, Frances, Ivan, and Jeanne folder. We added information to the folder whenever another hurricane started our way. We got much better at our getting-ready plans. Soon, preparing for a disaster became old hat. One change that the agency will probably make is to outfit the main office with permanent generators, so that we can generate enough electricity to power the servers and the air conditioning. In hurricane season, when it's 95 degrees and 100 percent humidity, your servers--and your people--will overheat in a few hours without air conditioning.

Q. Your agency is probably like other SMBs, in that you have to put together a data and business recovery plan using limited IT resources. What can other organizations--especially SMBs--take away from the lessons you've learned?

A. For one thing, you might think you're prepared for a disaster, but you never really know until you go through it. After the hurricane, I was thinking, "Okay, we've been paying for this online backup--will they be there when I call them at 10:00 p.m.? Is our data there? Can they restore it?" It took such a burden off of my shoulders to know that the online service was right there, available.

The cost of the online recovery service is nominal, especially when you consider that you don't have to restore the data yourself. I'm not a full-time tech person; I'm an insurance agent who oversees IT for our firm. I don't have $60K in payroll to spend on an IT person. For a business of our size, the only viable solution is to outsource our data protection. As the manager here, I can't tell you how relieved I was to get our people the data that they needed. Customers today expect you to be up and running no matter what. I've heard our customers ask, " If this place is hit by a hurricane, how is my data protected? Will you be able to file a claim for me?" It's nice that we have the right answer for them.

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The following statistics were gathered from various sources:

6% of all PCs will suffer an episode of data loss in any given year. Given the number of PCs used in US businesses in 1998, that translates to approximately 4.6 million data loss episodes. At a conservative estimate, data loss cost US businesses $11.8 billion in 1998. (The Cost Of Lost Data, David M. Smith)
30% of all businesses that have a major fire go out of business within a year. 70% fail within five years. (Home Office Computing Magazine)
31% of PC users have lost all of their files due to events beyond their control.
34% of companies fail to test their tape backups, and of those that do, 77% have found tape back-up failures.
60% of companies that lose their data will shut down within 6 months of the disaster.
93% of companies that lost their data center for 10 days or more due to a disaster filed for bankruptcy within one year of the disaster. 50% of businesses that found themselves without data management for this same time period filed for bankruptcy immediately. (National Archives & Records Administration in Washington)
American business lost more than $7.6 billion as a result of viruses during first six months of 1999. (Research by Computer Economics)
Companies that aren't able to resume operations within ten days (of a disaster hit) are not likely to survive. (Strategic Research Institute)
Simple drive recovery can cost upwards of $7,500 and success is not guaranteed.
U.S. businesses lose over $12 billion per year because of data loss.
Hardware or system failure accounts for 78% of all data loss.
Human error accounts for 11% of all data loss.
Software corruption account for 7% of all data loss.
Natural disasters account for only 1% of all data loss.
More vital data is being stored in smaller spaces.
Instant access to electronic data has become more crucial in day-to-day business.
Disaster prevention and recovery plans are often overlooked or outdated.
Most backup tools and techniques are not 100% reliable.
File corruption and data loss are becoming much more common, although loss of productivity continues to be the major cost associated with a virus disaster. (Source: 7th Annual ICSA Lab's Virus Prevalence Survey, March 2002)
The average company spends between $100,000 and $1,000,000 in total ramifications per year for desktop-oriented disasters (both hard and soft costs.) (Source: 7th Annual ICSA Lab's Virus Prevalence Survey, March 2002)
In addition to being more prevalent, computer viruses were more costly, more destructive, and caused more real damage to data and systems than in the past. (Source: 7th Annual ICSA Lab's Virus Prevalence Survey, March 2002)
Of those companies participating in the 2001 Cost of Downtime Survey: 46% said each hour of downtime would cost their companies up to $50k, 28% said each hour would cost between $51K and $250K, 18% said each hour would cost between $251K and $1 million, 8% said it would cost their companies more than $1million per hour. (Source: Ontrack - 2001 Cost of Downtime Survey Results, 2001)
At what point is the survival of your company at risk? 40% said 72 hours, 21% said 48 hours, 15% said 24 hours, 8% said 8 hours, 9% said 4 hours, 3% said 1 hour, 4% said within the hour. (Source: Ontrack - 2001 Cost of Downtime Survey Results, 2001)

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