Lost Laptops Cost Billions

Businesses are losing billions of dollars annually as a result of lost and stolen laptop computers, a new study shows.

Representatives from Intel, which sponsored "The Billion Dollar Laptop Study," and the Ponemon Institute, which conducted the study, announced their findings at a media event in San Francisco on Thursday.

The 329 organizations surveyed lost more than 86,000 laptops over the course of a year, the study found. Larry Ponemon, chairman and founder of the Ponemon Institute, said that based on these findings and a 2009 survey that put the average cost of lost laptop data at $49,246, the cost to these organizations came to more than $2.1 billion or $6.4 million per organization.

"A lot of organizations are incompetent at protecting information assets," said Ponemon.

Ponemon explained that the value of the lost hardware represented only a small portion of the estimated cost. Most of the cost is linked to the value of intellectual property on these laptops and the fees associated with data breaches and statutory notification requirements.

The study painted a grim picture about lost and stolen laptops. It found that laptops have a 5% to 10% chance of being lost or stolen over three years. Only 5% of lost laptops are ever recovered. Theft accounts for 25% of losses and likely theft for 15%. Sixty percent of lost laptops simply go missing, their fate unknown. Some lost laptops are believed to be stripped for parts.

Intel's interest in this topic can be explained by the fact that it offers anti-theft technology. The latest generation of this technology, Intel Anti-Theft Technology (Intel AT) 3.0, will debut in Intel's Core and Core vPro processor families during the first quarter of 2011. Intel AT provides the ability: to disable access to encrypted data; to prevent the PC from booting; to send customizable messages that display under conditions; to disable a PC after a certain number of login attempts; and to disable a PC when the user has not checked-in as required.

Version 3.0 adds the ability to send a remote 3G SMS message using special cellular hardware to disable the PC, before it can be booted.

The study happens to note that while 46% of laptops were reported to contain sensitive data, only 30% of them had disc-based encryption, only 29% had been imaged for backup, and only 10% had anti-theft features.

Intel was also present as an example of what can be achieved through best practices. Intel chief information security officer Malcom Harkins revealed that Intel, out of 87,000 laptops, only loses about 700 per year. That's five to ten times less than the average loss rate at the companies surveyed.

Harkins said that as Intel shifted its focus toward mobility in the late '90s, the company made a concerted effort to build business processes that fostered security and encouraged employees to take responsibility for safeguarding their laptops. He added that Intel tries to be fairly permissive about allowing employees to store personal information on their laptops, which he said encourages a sense of ownership and responsibility. Acknowledging that some information security professionals see the mingling of personal and professional data as a risk, he said, "I think it helps more than it hurts."

Harkins added that one problem in dealing with the issue is that security teams tend to want to keep quiet about lost laptops and lost data. He said he understood that impulse but insisted that being open can help people recognize the risk of losing laptops.

"The biggest vulnerability we all face today is misperceiving risk," he said.

Kevin Beaver, an independent security consultant and expert witness with Principle Logic, offered an example of this misperception. He observed that companies spend significant sums to protect themselves from SQL injection attacks but fail to invest in laptop tracking or remote data wiping capabilities.

"Laptops are always the greatest risk in any given security assessment, more so even than smartphones," he said, noting that laptops simply have more data on them.

According to the study, the places where laptops are most likely to be lost break down as follows: off-site locations (43%), while traveling (33%), and inside the workplace (12%). And 12% of the time the location of the loss is unknown.

Laptops are stolen most often when people travel with them. Ponemon observed that security checkpoints are the place where laptops are most frequently lost. Diluting the irony, he added that security checkpoints are also where travelers recover lost laptops most often.

To underscore the need for organizations to manage laptops carefully, Ponemon recounted interviewing one woman at a company who had lost 11 laptops in two years.

"She claimed she wasn't really that careful with laptops because the only way she could get a better one was to lose it," he said.