Typical lost laptop costs companies nearly $50,000, study finds

Apr 23, 2009 By Steve Johnson

A typical lost or stolen laptop costs employers $49,246, mostly due to the value of the missing intellectual property or other sensitive data, according to an Intel-commissioned study made public this week.

"It is the information age, and employees are carrying more information on their laptops than ever before," according to an analysis done for Intel by the Michigan-based Ponemon Institute, which studies organizational data-management practices. "With each lost there is the risk that about customers, employees and business operations will end up in the wrong hands."

The five-month study examined 138 laptop-loss cases suffered over a recent 12-month period by 29 organizations, mostly businesses but also a few government agencies. It said laptops frequently are lost or stolen at airports, conferences and in taxis, rental cars and hotels.

About 80 percent of the typical cost -- or a little more than $39,000 -- was attributed to what the report called a data breach, which can involve everything from hard-to-replace company information to data on individuals. Companies then often incur major expenses to prevent others from misusing the data.

Lost added nearly $5,000 more to the average cost. The rest of the estimated expense was associated with such things as investigative costs, lost productivity and physically replacing the laptop.

Larry Ponemon, the institute's chairman and founder, said he came up with the cost figure based on his discussions with the employers who lost the laptops. When he later shared his findings with the companies and government agencies, he said, some of their executives expressed surprise at the size of the average loss. But he noted that one of the employers thought the amount could have been even higher.

Indeed, a study several years ago by the FBI and the Computer Security Institute placed the average cost of a company's laptop at $89,000. officials could not be reached Wednesday to discuss the Ponemon study.

The individual losses associated with stolen or otherwise missing laptops in the Ponemon study varied from $1,213 to $975,527.

"The faster the company learns that a laptop is lost, the lower the average cost," the study said. "If a company discovers the loss in the same day, the average cost is $8,950. If it takes more than one week, the average cost rises significantly to approximately $115,849."

Santa Clara, Calif.-based Intel, the world's biggest maker of computer chips, had several reasons to do the study, said George Thangadurai, an Intel strategic planning director and general manager of its anti-theft program.

For one thing, Intel has recently introduced technology that companies can use to make notebooks harder to steal. That technology, among other capabilities, can help make a laptop inoperative when it is lost or stolen.

Thangadurai said Intel also wants to make laptops more secure so that businesses and individual consumers will be more inclined to use the devices, which depend on Intel's chips for a variety of functions.

"The more people feel comfortable buying notebooks ... they win, we win and everybody wins," he said.

John Girard, an analyst who studies mobile data-protection products with the research organization Gartner, agreed that there is a flourishing market for making laptops more secure.

"It is a growing industry," he said. "There's a sizable number of systems used in business that have no data protection at all. There's quite a bit of opportunity to sell in this space."

Although the Ponemon study didn't endorse any particular brand of notebook protection gear, it noted that "encryption on average can reduce the cost of a lost laptop by more than $20,000."



Based on 138 recent cases, the average cost was $49,246.

The biggest expense -- $39,297 -- was due to breached data.

The second-biggest cost -- $5,871 -- was for lost intellectual property.

If the loss is spotted within a day, the average cost is $8,950. If it goes undetected for more than a week, that cost rises to $115,849.

Encrypting a notebook can reduce the average cost by more than $20,000.

Source: Intel-sponsored study by the Ponemon Institute


(c) 2009, San Jose Mercury News (San Jose, Calif.).
Visit MercuryNews.com, the World Wide Web site of the Mercury News, at www.mercurynews.com
Distributed by McClatchy-Tribune Information Services.

Explore further: Birch Communications buying Cbeyond for $323M

add to favorites email to friend print save as pdf

Related Stories

A virtual boost is sought for PCs

Jan 28, 2009

What if you didn't have a separate work computer to deal with anymore? Instead, you and your co-workers would use personal laptops to access work files and software - without having to download anything on your computer. ...

The $100 laptop is coming

Jul 24, 2006

Some manufacturers Dr. Mary Lou Jepsen approached about producing and selling a laptop computer for $100 laughed at her. Despite this chiding and disbelief, the One Laptop Per Child (OLPC) chief technology ...

Recommended for you

TCS, Mitsubishi to create new Japan IT services firm

3 hours ago

India's biggest outsourcing firm Tata Consultancy Services (TCS) and Japan's Mitsubishi Corp said Monday they are teaming up to create a Japanese software services provider with annual revenues of $600 million.

Chinese tech giant Alibaba set to make a splash with US IPO

19 hours ago

The largest tech IPO of the year will come from a company that many Americans have never heard of. Alibaba Group - a Chinese e-commerce behemoth - has decided to go public in the U.S. after months of speculation that it would ...

Ex-Apple chief plans mobile phone for India

Apr 19, 2014

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

User comments : 0

More news stories

Students take clot-buster for a spin

(Phys.org) —In the hands of some Rice University senior engineering students, a fishing rod is more than what it seems. For them, it's a way to help destroy blood clots that threaten lives.

Finnish inventor rethinks design of the axe

(Phys.org) —Finnish inventor Heikki Kärnä is the man behind the Vipukirves Leveraxe, which is a precision tool for splitting firewood. He designed the tool to make the job easier and more efficient, with ...

First steps towards "Experimental Literature 2.0"

As part of a student's thesis, the Laboratory of Digital Humanities at EPFL has developed an application that aims at rearranging literary works by changing their chapter order. "The human simulation" a saga ...