Data Lost, Data Found

Recovery services can undo white-knuckle crashes

By Larry Armstrong

It was a scary moment for Corinne Cox, office manager of the 20-employee Family Doctors of Vicksburg, a medical office in Vicksburg, Mich. "My computer was making whirring and clicking noises like a record player when the needle is stuck. Then it just froze," says Cox. That computer contained the lifeblood of the business: the checkbook, the payroll, employee information, and monthly reports. Things got even worse when she discovered that the backup tapes she was taking home every night were blank—for reasons she still can't explain. "I was literally in tears," she recalls. "I made myself physically ill from the stress."

Cox's computer was a Dell, and a technician she called at that company hooked her up with DriveSavers Data Recovery, a Novato (Calif.) business that specializes in retrieving data from damaged hard-disk drives, camera memory cards, and USB flash drives. Cox sent the hard drive overnight to DriveSavers. She got her data back in two business days, just in time to make the next payroll. The cost? $3,540.

Fixing a hard drive isn't cheap, until you compare it with the costs of losing all your business data. A 2003 Pepperdine University study put the cost of data lost to businesses at $18 billion a year. Such expenses can spell the end of a small company. About 43% of all businesses that experience a catastrophic data loss never reopen, and 51% shut down within two years, according to a University of Texas study. "We see it every day," says Scott Gaidano, DriveSavers' founder. "Entrepreneurs can't afford an IT staff. They're focused on their business, not on technology, and they don't back up their data or they don't back up often enough."

Most data losses aren't from hurricanes, floods, or fires. The culprit is more often human error: accidental deletion of files or e-mail messages, reformatting the drive, or simply not backing up often enough. A savvy amateur or IT technician can usually restore data using one of many recovery software programs such as Recover Lost Data ($40) from Migo Software, Handy Recovery ($39) from SoftLogica, or EasyRecovery Lite ($89) from Kroll Ontrack, which also is the largest of the data recovery services. Typically, you can download a free version of the software. It shows you the files it can recover, but you can't save them unless you buy the full version of the software.

If your drive starts to fail, don't bother with do-it-yourself tactics. Say you've dropped your laptop or had a power surge and now your drive won't work, or, if it does, your files are inaccessible. Or you hear clicking and grinding noises when you turn on your computer, a telltale sign that the drive is reaching the end of its useful life (typically five years or so). It's time to call a specialist such as Ontrack or DriveSavers. In most cases, you'll send them the drive, though some make house calls. They will take apart the drive, rebuild it from spare parts, boot it up, and save your data to a new drive. An average job for a PC or Mac costs from $1,000 to $1,500. Expedited service, which worked for Cox, costs more.

You'll get your data back on DVDs or, as most people do, on a new, external hard drive that plugs into your computer. I recommend that. For one thing, after you've transferred your data into your (probably new) computer, you'll have a spare disk drive. This time, use it to back up your PC.

Larry Armstrong writes about personal technology for BusinessWeek SmallBiz. You can e-mail him at

    Before it's here, it's on the Bloomberg Terminal.