Backing up data might not seem like a high priority or a particularly exciting business decision, but it’s essential. If you’re utilizing SaaS cloud-based systems, like Microsoft 365 or Google Workspaces, you should be backing up your data. In fact, a 2018 study found the global average cost of data loss was around $3.6 million, or approximately $141 per data record. Backing up your SaaS data should be a standard protocol; it helps ensure the safety and data in the event of any kind of disaster.
If you aren’t convinced, read on to learn about the real costs of data loss--and how they could damage your company.
Risks and Hazards of Data Loss
Your data is precious, but it is also vulnerable. There are a number of risks and hazards that could result in costly data loss. If you don’t have a set backup plan in place, your data could be exposed to the following risks and hazards:
1. Natural Disasters: Events like hurricanes, earthquakes, and tornadoes can pose a risk to your data. If you live in an area prone to any kind of natural disaster, it’s critical you have a backup plan in place. Power outages caused by natural disasters can leave you unable to access your data for hundreds of hours. For example, Hurricane Rita, which hit Texas in 2005 resulted in 384 hours of no power. Disaster recovery plans vary based on cost and company size but can exceed $10,000 if a company has high losses during downtime.
2. Human Error: Unfortunately, human error is the leading cause of data loss. Accidental deletion or lack of understanding of an interface can result in data loss. Without backup measures in place, when data is deleted, there’s no getting it back. In 2018, 90 percent of data breaches and losses were a result of human error.
3. Cybercrime: Hackers, malware, and ransomware are other huge risks companies face in protecting their data. Not only are malicious attacks common, but they are also the most expensive kind of data breach. The average data breach in the U.S. in 2020 cost $8.64 million. In the same year, around 52 percent of data breaches were caused by malicious attacks.
4. Provider Outages: Dealing with unexpected provider outages can lead to data loss, especially when you’re in the middle of working on a file. Providers like Microsoft and Google continue to have their share of outages, leaving users without access to their data for hours on end. These outages are costly: it’s estimated that data loss from data center outages costs U.S. businesses an average of $7,900 per minute.
5. Inability to Access Data: For whatever reason, you’re unable to access data, companies lose out on productivity during downtime. Datto reported that depending on a company’s size, downtime costs can range from $10,000 per hour to more than $5 million per hour.
Read on to learn how each of these hazards contributes to data loss and expensive recovery costs.
The Real Cost of Data Loss, Beyond Money
Whether it’s a natural event, human error, cybercrime, or provider outage, inability to access data, or lost data, in general, comes at a cost. We’ve highlighted some of the financial costs behind data loss above, but data loss isn’t just about money. Data loss has other hidden costs and consequences that can damage your business, apart from finances:
- The cost of downtime: Downtime refers to the time business spend “offline” while they experience a provider outage. The longer businesses are offline, the more money and productivity they can lose. For example, when Microsoft 365 and Google experienced outages in 2020, users were unable to access their email, drive, and other data. Data-loss from downtime events, like ransomware, can cost small companies more than $8,500 per hour.
- Lost productivity: When data loss happens, business productivity suffers. Lost data disables users and employees from accessing files and completing their essential work duties.
- Revenue disruptions: Data loss can also lead to a halt in the revenue process. If companies can’t access consumer orders and transactions, this results in a delay in profits being made. Furthermore, if ransomware is at play, an entire system could be encrypted, leaving users entirely locked out of the platform.
- Production stoppage: Data loss can even alter the production process for some companies, which in turn, results in a decrease in products available for consumer purchase. This can result in a financial loss ranging from $10,000 to $250,000 per hour for large industrial manufacturers.
- Regulatory fines: Non-compliance with industry regulations--like finance and healthcare-- is another hidden cost of data loss. If a business is not HIPAA compliant or violates GDPR regulations, it could face serious fines. Regulatory fines can be caused by data loss in the event a medical device with sensitive information is lost or stolen, or if a finance company experiences a provider outage that leads to GDPR violations. Depending on the severity of negligence, a HIPAA violation can cost anywhere from $100 to $50,000 per record.
- Damaged reputation: Regardless of how data loss occurs, any disruption in service for a company’s consumer can damage their overall reputation and credibility. This can also result in a drop in profits, per consumer’s changed perception following a problem.
As you can see, data loss isn’t just about financial recovery costs--there are also a number of consequences that can seriously impact a businesses’ overall finances, reputation, and productivity. However, there are options in which you can avoid data loss and protect your data.
Protect Your Data and Save Costs With Backupify
Having an automated SaaS backup system in place, like Backupify, can make a huge difference in savings and preventing data loss. Security automation solutions and incident response preparedness can save businesses an average of $3.58 million. Backupify offers an automated cloud-based SaaS backup platform that also protects and secures data. With robust security regulations and procedures, like our private Datto cloud, SOC Type 2 compliance, and multi-factor authentication, Backupify keeps your data secure from any kind of data loss.
Get started with Backupify today and request a free demo here.