It’s the last service that’s the hardest to sell—except perhaps when a company has just experienced such a catastrophe and is anxious to make sure it doesn’t happen again.
Backup systems definitely fall into the “avoiding catastrophic costs in the future” category. Buying an external hard drive or signing up for an online data backup plan is money you spend now for something you hope never to use—much like insurance.
Even less appealing is the fact that any kind of backup system can fail. Tapes are notorious, but I’ve heard of more than one person recently whose backup drive went out either just before or just after the main drive. CDs and DVDs can get scratched. Online backup services (one of which has been attempting a saturation campaign in comments on my blog) have the advantage of keeping their own servers in secure datacenters away from your location, and thus being to a fair degree theft- and natural disaster-proof, but there’s still a chance that something will happen to them, and those solutions which consumers can afford will only back up a few GB of your data and are, as I’ve said before, only a viable option for people with high-speed connections. Just as no insurance plan can cover every possible thing that could happen to you, neither is any backup system 100% proof against data loss.
But almost any backup system is better than none at all, and this is because losing all your data is indeed a catastrophic expense. How much an irreparable drive failure costs you depends on how much of your business (or even personal finances, etc) resides on your computer and the degree to which lost data can be reconstructed. Perhaps you’ve still kept the business cards for all those people in your contact database. Perhaps you’ve printed out the hundreds of customer transactions your business makes each day/week/month.
In those cases, reconstruction is at least possible, but you’re going to have to pay someone to re-enter all that information, and if you’ve lost a year’s worth of data, that’s a lot of hours. Doing it yourself could be even more expensive than paying someone else, if you have to postpone doing billable work or otherwise stop bringing in new business and income.
Then there’s the cost of data recovery. Rates of $250/hr or $250 per gigabyte are not unusual. Some companies will waive the fee if they can’t recover anything; some will charge for their efforts, regardless. And your data may not be completely intact when you get it back.
Hardware costs, for repair or replacement of damaged disks, are often the least expensive of your problems, and a warranty or extended service contract may cover them. What the warranty doesn’t usually cover is rental of a replacement machine while yours is repaired. Data backups can’t spare you that expense, either. It’s worth keeping an older but functional machine around as a backup if you only have one main machine in your office rather than several. (Laptops are easier to store out of the way, though also inherently more fragile.)
Most catastrophic of all is the potential cost if you can’t reconstruct or resurrect your data. This is the part that puts people out of business.
Compared to that, a couple of hundred dollars for a good external drive or $10/month for a basic online backup service doesn’t seem like very much at all.
Now, if only I could avoid catastrophic loss of brain function after getting up at 4 AM to help put on events like the Jeffrey Fox presentation!