Market analysts suggest that the Eurozone’s economy will not grow this quarter and that both consumer and investor confidence is weakening. Inevitably, the IT department will come under even greater scrutiny and will need to demonstrate that it is maximising efficiency and managing costs tightly.

New research we’ve just published, “Insights: Data Protection and the Cloud 2011″, shows there is clear room for improvement. Despite the huge advances in data protection technologies in recent years, almost all European companies (94%) have lost data and applications in the last 12 months. Bearing in mind that data losses cost European businesses around €260,000* in lost revenue each year, I was surprised that so many companies are still falling into this trap. This is an avoidable cost if they have the right systems in place, and it’s an expensive mistake to ignore the risk. Data loss can damage reputation and customer service, and few companies can afford to shed customers in the current economy.

That’s not the only way in which businesses are vulnerable, either. The survey also revealed that Disaster Recovery (DR) is often not a priority for senior management and many companies do not have comprehensive DR plans. When resources are tight, it’s particularly important that plans are in place to cope with any adverse circumstances. Disasters do strike, and companies need to be resilient to bounce back quickly before any permanent damage is done.

Perhaps companies are scared that data protection strategies are expensive? The good news is that cloud computing is emerging as a more cost-effective solution, ideal for the current economic climate. Indeed, over a third of organisations expect cloud computing to play an increasingly important role in their business continuity plans over the next year. Using the cloud for data protection can help organisations convert CAPEX to OPEX, and enable better budget management as companies typically pay only for what they use.

Many companies are finding that the cloud can offer stability in an unstable economic environment. As a result, they can free up resources to focus on performance rather than recovery. There’s a saying that it’s easier to save a dollar than make a dollar. With the cloud, businesses have a chance to not only save money, but maybe even save the business.