80% of Businesses WON’T Go Under After a Data Loss Disaster … But They Might Wish They Had

by J. Colin Petersen, President & CEO

There’s an often quoted statistic that 80% of businesses go under after a data disaster. But that’s not what I worry about most. Despite living in California, I’m horrified each year at the destruction caused in the Midwest each year by tornadoes. As a second-generation Californian, I find it astonishing how visitors from Kansas worry about earthquakes. I’ve felt two in my lifetime. They have a season for tornadoes.

I thought about it during the November 2014 earthquake in Napa, California. There was no use crying over spilt wine – although there probably was some – but once you know that people are okay, you have to wonder how the businesses operations fared. Were their offices damaged by fire or water? Or did electronics get fried in a power surge?

To the non-business owner, this sounds trivial. A hard-drive or a server seems like a small thing in comparison to inventory, but the damage to business computer networks and the data they contain are where the economic losses can really add up.
Will a Disaster Take Out 80% of Businesses?

If you haven’t considered the destruction of your digital business records as a potential disaster, you should. Especially if you’re heard the oft-repeated statistic that 80% of businesses close their doors within a short time after a major data loss. Which, it turns out is – if not a complete lie – unsupported.

Do a Google search and you’ll find everyone from backup cloud service companies to I.T. companies quoting this frightening statistic in an attempt to push clients into using their services. But Andrew Hiles of Kingswell International, Ltd. conducted extensive research into reports on business closures after data disasters and found that few, if any, were substantiated.

My personal experience backs this up. I’ve worked with dozens of companies who’ve had complete server failures and only one is no longer operating (they called us far too late). I will always be straight-forward with you about your business technology. Look, if your server fails and you lose all your business information, you won’t go out of business … you’ll just wish you had.

Here’s a More Likely Rundown

You might imagine the scenario like the finale of a movie. Cut to exterior; business building is half-demolished, the remains of the server and all the business records clearly visible in the smoking ruins. The owner – head in hands – sits down heavily on the sidewalk and mutters, “I’m ruined. Ruined!” Cut to office scene; business owner is now working for someone else, stuck in a cubicle filled with paperwork.

In reality, business data disasters often start out quietly in the background. If you don’t have someone focused on server monitoring or network monitoring, you could miss brewing trouble. Until a few errors pop up, things start running slow and then it snowballs until all hell has broken lose.

“Where did you save the invoice for our new client?” you ask accounts receivable.

“In the ‘Invoices’ folder. Where I save all the invoices,” he says.

You believe him, because you saw it there yesterday. But it’s not there now. Strange. But you’ve got a hard copy sitting on your desk and you’re able to get the information you need right now. In the rush of the last day of the month, you forget about the missing invoice.

Until you ask for the monthly receipts summary and the AR person looks up, panicked, “I can’t pull up the report. I can’t pull up any reports. Uh … I can’t access any of my files on the server.”

Okay, you tell him to not worry. You have a backup system. “Who’s in charge of the backups?” you ask the office.

It gets very quiet. Finally a voice pipes up, “Um, Janet was in charge of that.” Janet retired and moved out of state six months ago.

“Where are her credentials? Who’s got all her login information?” Again … crickets.

Someone says they think they have her email address. You go back into your office and start looking through your files to see if anything else is missing. It doesn’t take long before the volunteer comes in, looking troubled, “I can’t send email. And no one can get on the internet.”

You’re not a computer expert, but you take a look at the server anyways. It’s quiet. No lights, no fans running, so you press the power button … nothing. Now what do you do?

It Depends on Who You Are

Not a J –  I.T. Outsource Client
You call your on-call or part-time computer repair guy who’s in charge of server monitoring. He doesn’t answer so you leave a frantic message. He calls back a day later. You tell him it’s an emergency. “Sorry, it’ll have to be next week,” he says, “I’m out of state for my sister’s wedding.”

By the time he looks at your system, you’ve already lost revenue. The guy tells you the server is completely dead and you need a new one. Which takes two weeks to ship. What are you supposed to do in the meantime, you ask? The guy can only shrug. He fixes computers. He doesn’t help businesses with operations, business continuity and technology problems. And he still bills you ten grand. I’ve seen it happen.

For those who are doing business with me, now you know why I spend so much time learning about your business. If you’re not a client, I don’t know how your business runs or exactly how much of what you do is coordinated and controlled by your network, but I do know that you’re going to lose a ton of productivity. You’ll have staff who are under-utilized. Which costs you money. You might not close sales. Which costs you money. You’ll buy a new server. Which costs you money. And you’ll need to pay someone to configure the server, reconnect the workstations and get your data restored. Which takes a lot of time. And costs you a lot of money.

It’ll take three or four weeks at a minimum. Assuming you have a reliable, frequently tested and easy-to-restore backup system in place. You do have that, right? If not, you’re going to experience the most miserable two to three months of your business life trying to get all the pieces put back together. With a little planning, you don’t have to do this to yourself.

J –  I.T. Outsource Client without BDR/BCD
Since the J Support and J Support Pro packages include 24/7 monitoring, any gradual server decline is going to have been tracked and reported. I’ll have mentioned it in your monthly server monitoring section of your executive report with recommendations on actions to take. But what can we do for you if there’s an unanticipated problem where your server unexpectedly fails, gets burned up, or otherwise destroyed? You’ll survive – but it will be miserable if you don’t have a reliable and complete backup plan.

We’ll install your new server, get your workstations reconnected and start monitoring your network again, but we can’t replace data that isn’t backed up. All we could give you is love and encouragement. Your business may never be the same. Please talk to me right away to find out how to incorporate our proprietary triple-redundant Backup and Disaster Recovery plan with the Business Continuity Device into your business survival plan.

J –  I.T. Outsource Client with BDR/BCD
If you are a J –  I.T. Outsource client with the Backup Disaster and Recovery / Business Continuity Device (BDR/BCD), none of this applies. You won’t be in this situation. We let you know if the server has problems, usually after we’ve already fixed them. If there was a risk of failure, we would let you know and together we’d implement a plan to replace the server.

If there was an unforeseeable disaster scenario such as a catastrophic failure from a power surge which server monitoring can’t predict, we would have you back up and running within an hour. Your staff may not even notice. It’s like a self-installing spare tire which lets you go 70 mph on the freeway on your way to the tire shop.

If the old server is toast, you’ll need a new one, but installation and setup is already in the plan for all our J Support clients. In other words, you don’t pay anything extra for the time and labor. We’ll also make your recovery a priority. You’ll have your new server in place and ready within 10 business days but you’ll have been operational all that time because of the Business Continuity Device. Not sure which plan you’re on? Call me.

What to Do Next

• If you’re a J –  I.T. Outsource client with the Backup and Disaster Recovery plan and Business Continuity Device (BDR/BCD), go to bed tonight and sleep soundlyYou’re covered.

• If you’re a client but you don’t have the BDR/BCD, call me now to find out how you can add this to your current plan.

• If you’re not a client, ask your I.T. department or computer repair guy what they are doing to monitor your server and protect you from data loss or destruction. If you don’t like their answer or you just want to get a second opinion, feel free to call me, J. Colin Petersen, President & CEO, at 559-485-4335 for a casual conversation about your options.