The modern world runs on data, and without it, things quickly grind to a halt. Businesses use data for everything, including sales, marketing, logistics, and staffing. What happens when that data is lost? Taking a look at some statistics on data loss should help paint a clear picture of how dangerous it can be for organizations all over the world.
The sheer amount of data being stored, processed, and managed every day is staggering, and the International Data Corporation (IDC) predicts that the global datasphere will grow to 175 zettabytes by 2025. Among those trillions of gigabytes of data are your business’s confidential and sensitive files, applications, and documents. Read through these essential data loss statistics to learn what places your data at risk and why backups are vital for long-term success.
What Industries Are Vulnerable to Data Loss?
The threat of data loss is universal across all industries, but there are some businesses that find themselves more susceptible than others. From a financial standpoint, highly regulated sectors are especially vulnerable because of potential penalties and fines.
Recent studies have found that these specific industries face the greatest challenges when it comes to data breaches:
- Healthcare: With extensive oversight, strict privacy laws like the Health Insurance Accountability and Portability Act (HIPAA), and the increasing interest of cyber criminals, healthcare organizations top the list of at-risk industries. The average cost of a data breach in the healthcare industry is $10.1 million.
- Financial services: Businesses operating in the sphere of financial services are attractive targets for ransomware and, like healthcare companies, are heavily regulated. Recent studies have found that, on average, a data breach in a financial services organization costs $5.97 million.
- Pharmaceuticals: Attacks on pharmaceutical companies are increasingly commonplace and expensive, with an average cost of $5.04 million, Between 2018 and 2022, a reported 58% of pharma executives had their corporate credentials exposed in a breach.
- Technology: With an average data breach cost of $4.88 million, technology companies are high on the list of targets for cyber attackers, and the problem may be larger than people know. Some businesses have begun using non-disclosure agreements (NDAs) as a means of keeping breaches hidden from the eyes of the public and regulators.
- Public administration – Attacks on government agencies pose a threat to essential infrastructure and services, and global events have escalated things significantly. According to the United States government, Russian state-sponsored threat actors targeted and breached multiple defense contractors between January 2020 and February 2022.
Other high-value targets who are at an elevated risk of data loss and cyber attacks include organizations in education, manufacturing, and retail.
How Frequently Do Businesses Back Up Their Data?
With so much at stake, it seems logical to conclude that every organization would back up its data regularly. While the rate of backups saw a drastic uptick following the onset of the COVID pandemic and the corresponding rise in remote work, numbers have since dropped off.
Individual IT users are responsible for properly managing and securing their data at all times, yet the frequency with which they perform backups is often quite low. Consider these Acronis statistics regarding data backup frequency for IT users:
- Only 10% conduct daily backups.
- Approximately 15% of users back up data once or twice a week.
- Just over a third of users rely on monthly backups.
Most shockingly, 41% of users rarely or never back up their data, leaving themselves completely exposed to total data loss should an incident occur.
When it comes to backup regularity, the numbers for IT managers are slightly better. Approximately 25% of IT managers perform backups monthly and 33% back up data weekly. However, these organizations still run the risk of significant data gaps that could result in costly losses if an outage or attack were to occur, and the chances are good that one will.
Most businesses need to recover data at least occasionally. According to Acronis, 72% of all users had to recover from a data backup at least once in the past year, and 33% had to do so more than once. Businesses that fail to anticipate this need can be left with disastrous consequences when their data is compromised.
What Types of Data Backups Do Businesses Use to Prevent Data Loss?
Companies that make use of data backups can choose from a range of options, which vary in terms of price and convenience. Over the past decade, there have been significant shifts in the data backup formats that organizations most frequently use.
Preferred Backup Types
Businesses can store their data on-premises using hardware or in the cloud using a private or public service. Recent studies have found that cloud storage is by far the more popular choice:
- Local: Among businesses, 33% of users now rely exclusively on local backups, a marked decrease from previous years.
- Cloud: Many businesses have shifted to the cloud, with 54% of organizations surveyed relying solely on cloud backup storage. In addition, as of 2021, 50% of all corporate data was stored in the cloud.
- Hybrid: Although many experts believe hybrid backup is the best possible data backup solution, only 12% of IT users are using this model, which combines cloud and local storage.
Examining expense data reveals the same trend toward cloud storage. Up until a few years ago, spending on physical data centers was significantly higher than on cloud services. In 2020, however, the numbers suddenly flipped, and they have remained that way ever since. In 2021, enterprise spending on data center hardware and software reached $98.5 billion. That number was eclipsed by the spending on cloud infrastructure services, which hit a record-breaking total of $178 billion.
While cloud backups have become far more popular in recent years, it’s worth noting that the type of cloud service that businesses use can make an enormous difference in the cost of a data breach. While using the public cloud may be the most affordable option for data storage, the opposite is true if a data breach occurs.
These statistics from IBM’s “Cost of a Data Breach 2022” report are very illuminating:
- For organizations that use public cloud storage, the average cost of a data breach is $5.02 million.
- Organizations that store their data in public clouds have an average data breach cost of $4.24 million.
- Data breaches cost substantially less, $3.80 million on average, for organizations that use a hybrid cloud model.
Even for smaller businesses with more limited budgets and minimal storage needs, the potential savings when experiencing a data breach are reason enough to opt for an affordable hybrid backup rather than a public cloud service.
Fail Rates of Backups
Businesses that back up their data are definitely a step ahead in protecting themselves from the potential consequences of a data breach. Unfortunately, backups aren’t without their flaws. A 2021 study by Veeam found that data backup systems, particularly older ones, have limited rates of success. According to the study, on average:
- 57% of backups will be successful.
- 61% of restores will be successful.
- A business’s ability to fully recover data will succeed only 35% of the time.
This doesn’t mean that backups aren’t worthwhile. Rather, it demonstrates how important it is for businesses to be smart about the kinds of data backup that they use. A hybrid backup solution that includes both hardware and cloud storage can help mitigate the issue of failed backups because there are multiple systems available to use for data recovery.
What Kind of Data Should Be Included in a Backup?
When businesses think of backups, they might focus only on essential applications and files. However, there are a number of different types of data that deserve to be protected.
Businesses keep some of their most vital and sensitive information in databases. As a result, these files are also much more likely to be backed up than other forms of data. As of 2019, 91% of organizations worldwide used some form of backup to protect their databases.
While virtual meetings may have replaced written communication in many situations, email remains a primary source of information sharing within businesses. This means that it is also a major repository of data, one that is often left unprotected. A 2021 report from Egress found that:
- 95% of IT leaders feel that sensitive data is at risk of unauthorized access and loss on email.
- 83% of organizations have experienced data breaches from email.
- 80% of employees use email to share sensitive data with clients and coworkers.
- Every email breach incident takes approximately 60 hours to resolve.
It’s clear that the protection of email data is being sorely overlooked, even by businesses that have otherwise strong cybersecurity measures in place.
Despite the growing popularity of software as a service (SaaS) for business use, many organizations fail to back up their SaaS data. According to a study by Rewind, more than 49% of SaaS tool users experienced data loss in 2020. However, data from Statista shows that fewer than one in five organizations back up their SaaS data. This is especially unfortunate considering that there are high-quality SaaS backup solutions available on the market.
Other Data Types
Backups for other valuable forms of data are hit-and-miss. For instance, 62% of organizations back up proprietary application data. On the other hand, only 28% back up data from research and development, thus leaving highly important documents and files vulnerable to an unforeseen disaster.
What Are the Causes of Data Loss?
From tornados to power outages to hardware failures, there are many potential causes of data loss. While natural disasters like floods are a common fear, they’re far from being the only threat to your data. As the evidence shows, there are other hidden problems that should also cause concern:
- The human element: 82% of breaches in 2021 involved a human element, such as error or misuse.
- Hardware failure: Hardware failures are one of the leading causes of lost data, with some surveys finding that they account for up to 43% of data loss.
- Malicious software: Malware and scams also pose a significant risk. A recent survey found that 86% of organizations had at least one user who tried to connect to a phishing site.
Why does the cause of data loss matter? Knowing what might cause your organization to lose valuable data is essential so that you can plan accordingly.
Hard drives, for example, are all destined to fail because they have a defined lifespan, generally ranging from three to six years. Businesses that are aware of this inherent limitation can schedule timely replacements to reduce the risk of unexpected failures that can result in data loss.
Likewise, the knowledge that the human element plays a prominent role in so many breaches should motivate companies to offer their employees high-quality education. The SANS institute reported that 80% of business data breaches are caused by people, many of whom have insufficient training. Developing a thorough cybersecurity training program could prevent employees from unknowingly giving bad actors unauthorized access to sensitive material.
How Much Does Data Loss Cost?
One of the reasons data loss is such a frightening prospect is that it’s so expensive. Small and medium-sized businesses can be financially devastated by the cost of missed sales, damaged customer trust, and recovery processes. Even large enterprises like Amazon have lost millions in revenues due to outages.
When business owners and IT managers weigh the expense of implementing effective data backups and disaster recovery, it might be helpful to consider the following numbers:
- On average, a data breach in the United States costs $9.44 million. The global average is $4.35 million.
- The average cost of a ransomware attack is $4.54 million.
- In a 2020 survey conducted by ITIC, 40% of large businesses said that one hour of downtime can cost between $1 million and $5 million.
- The average cost of a data breach is $164 per record.
These amounts also don’t account for other expenses associated with data loss. Businesses may have to contend with fines due to compliance regulations, legal fees in the event of a lawsuit, or settlement payments for victims whose data is accessed or leaked.
How Can Businesses Save Money with Data Backups?
Data backups are one component of comprehensive business continuity and disaster recovery plans. They can help reduce downtime and maintain regulatory compliance. Although planning for disaster recovery and implementing regular data backups requires some form of financial investment, it can save businesses substantial funds in the long run.
Organizations that prioritize disaster preparedness can benefit from:
- Faster containment: By containing a data breach in 200 days or less, businesses can save an average of $1.12 million.
- Testing response plans: When they experience a disaster, organizations that have an incident response team in place that regularly test their recovery plans save an average of $2.66 million.
- Automated systems: Organizations that take advantage of developing technologies, like artificial intelligence (AI) and automation, contain breaches more quickly and save an average of $3.05 million in costs.
As the number and frequency of threats grow, businesses may not be able to avoid every instance of data loss. They can, however, reduce the financial damage of these events by investing in data backup solutions.
Are Businesses Taking Data Loss Seriously?
Although many businesses are not backing up their data as frequently as experts recommend, they seem to be very aware of how important measures like these can be. In a 2022 survey, 80% of respondents listed backup and disaster recovery as major priorities for IT departments in 2022.
In contrast, a recent survey found that 51% of small businesses have no cybersecurity measures in place, with 60% of small businesses believing that they are too small to ever become a target. In reality, evidence has shown that small businesses are equally or more likely to experience cyber attacks.
How Can Businesses Prevent Data Loss?
It’s critical for every business to be proactive when it comes to data loss. Don’t wait until a disaster has occurred to make a plan to restore the information that makes it possible for your organization to function. Although you may be able to retrieve your lost data with the help of a reliable recovery service, you can save time and money if you stay a step ahead of the risk by implementing a secure data backup solution.
If you aren’t currently using a data backup solution or would like to upgrade the one you have in place, the business continuity and disaster recovery experts at Invenio IT are ready to help. Reach out to learn more about how you can protect your business from the ever-present threat of data loss.