Survey: Nearly Half of US Small Businesses Have Lost Data

By Donna Fuscaldo

Despite all the warnings about the importance of backing up data, small businesses are still losing significant amounts of data each day to hardware and software failure and accidental deletion.

A recent survey from Carbonite, the Boston-based online data backup company, found that 48% of U.S. small businesses with two to 20 employees have experienced a data loss this year, and increase from 42% in December.

“Even despite using some form of physical backup almost half of American small businesses have experience some data loss,” says Peter Lamson, general manager of small business for Carbonite. Lamson listed a variety of reasons for the data losses including hardware failures and computer viruses. The survey, which included 125 small businesses, showed 54% of respondents cited hardware/software failures for data losses, 54% blamed accidental deletion, 33% named computer viruses and 10% pointed theft as a reason for lost data.

While the reasons differ, one thing is for sure: losing data can be detrimental to a small business and even put it out of business altogether. According to a report by the UK’s Department of Trade and Industry and PricewaterhouseCoopers, 70% of small businesses that have a major data loss go out of business within a year.

While small businesses know the importance of backing up data and take the steps to buy hardware to protect their data, those good intentions quickly fall by the wayside, says

Like most good, well-intentioned habits, Lamson said small businesses start out strong when it comes to protection and back up their data every day. But as time passes, they starting back up less frequently a day becomes a week, which can then become a month, leaving small businesses vulnerable to data losses.

According to the survey, physical devices were the primary way small businesses backed up data with 41% of respondents using external hard drives, 36% using CDs/DVDs and 36% using USB/flash memory sticks.

“That backup infrequency could lead to gaps,” he says. What’s more, physical backup devices don’t protect small businesses from natural disasters, floods and fire.

Respondents of the survey also found the practice of backing up data cumbersome: 31% describe it as a hassle and takes away time from other things that need to get done.

Cloud computing is quickly becoming an easier way for small businesses to protect their data online, which also allows information to be accessed at anytime from anyplace.

“Up until this point the ability to backup online was limited to enterprises because it was cost prohibitive,” says Lamson, noting the advent of cloud based data backup makes it affordable to any size business. Indeed, respondents of the survey said they recognized the benefit of online backup systems, but cited cost as the number one factor for not going that route.

While cloud-based data backup is now more affordable for small businesses, they still have real concerns about the security of handing over data back up to a third party. Another concern: that the company its backing up its data with will disappear. Those fears, according to Lamson, can be real, depending on what service provider the small business decides to go with.

“You need to ensure the online cloud back up company you’re dealing with is reputable,” says Lamson. “You want to deal with a company that has proven experience in the online backup industry. Not some small fly by night startup.”