xpsm1730.jpgA recent study commissioned by Intel and conducted by the Ponemon Institute shows that a lost or stolen laptop is worth far more than just the hardware. When everything is taken into account, such losses cost a company as much as $115,000 and an average of $49,000.

The study analyzed 138 cases of lost and stolen notebooks. The average cost of $49,246 was based on costs associated with much more than just hardware and software replacement: detection and escalation, forensics and investigation, data breach, lost intellectual property, lost productivity, and other legal or regulatory costs. The study notes that the highest cost components are data breach and intellectual property loss.

Data breach costs alone represent 80% of the amount

Several factors impact the cost:

  • Encrypting the hard drive reduces cost by nearly $20K. Why not more than that? According to my conversation with Dr. Larry Ponemon, Chairman and Founder of the Ponemon Institute, it’s because most organizations rely on file-level encryption rather than encrypting the entire disk.
  • Ownership of the laptop affects cost. The higher up in the corporate ladder you go, the more the cost … with the exception of the CEO. A CEO’s laptop is valued at $28,449 while managers’ and directors’ laptops are in the $60K range. Although the exact reason for this is unclear, it’s possible this is because the laptops of CEOs are encrypted more often, or because the loss is discovered sooner.
  • The longer it takes for anyone to discover the laptop loss affects cost as well. If the laptop is lost more than one week before the loss is noted, the cost escalates to over $115K. The same day: it’s about $9,000.
  • Finally, you might think backing up a laptop would reduce the cost to a company, but you’d be wrong. If a laptop is fully backed up, the cost to a company is $naerly $70K, while when it is not backed up the cost is only $39K. Why is this? The Ponemon Institute theorizes it’s a “what you don’t know about won’t cause panic” scenario. What this means is that if a backup image is restored to a new laptop, the company can see exactly what how much sensitive info was on the lost laptop. Thus, you’re more likely to have panic set in.

Yes, I know, that last point is somewhat humorous.

The Ponemon Institute went on to tell me that only about 20% of laptops are stolen. That’s right, 80% are lost.

This wasn’t a totally altruistic study, Intel detailed its Intel Anti-Theft Technology, which involves embedding measures in the chipset. These include, but are not limited to:

  • Encryption keys stored on the chipset rather than the hard drive. That means if you remove the hard drive, there’s no way to decrypt it.
  • A “poison pill” solution programmed into the PC that can be triggered by internal detection mechanisms or by a remote server to lock a lost or stolen notebook, rendering it completely useless.

Of course, the best way to stop worrying about laptop theft or loss is to not let it happen. Quite obviously, if it was theft at gunpoint, that’s one thing. 80% losing their laptops (and the Ponemon Inistitute didn’t elaborate as to it being carelessness, travel loss, or what), that’s pretty bad.