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Portable "external" hard drives
In 1980, storing gigabytes (GB) of data required refrigerator-sized disk storage devices like the IBM 3380s pictured at left. Cost: tens of thousands of dollars. Today, hundreds of GB can be stored on portable external hard drives no bigger than a book. Cost: less than a hundred dollars. For a few hundred dollars, you can store terabytes (thousands of GB).
What is it, and how does it work?
A portable "external" hard drive is essentially the same hardware as inside your desktop or laptop computer, except self-contained in its own case. (Many computer stores sell drive enclosures, allowing you to build your own portable -- e.g., using the hard drive from a "retired" computer.)
The drive connects directly to a desktop or laptop computer using a USB and/or Firewire data cable. Alternatively, a "networkable" drive can connect to a router via an Ethernet cable, to be shared among multiple computers.
The device may be powered by the data cable alone or, in the case of larger units, require a separate transformer and 110-volt AC connection. (More on connection options in the next section.)
Picking the right device
Capacity The first question to address is how much storage you really need. Higher capacity drives provide a lower "cost per GB" of storage, but that's a trifling advantage if you don't really need the added space.
If you only need a 1-2 GB of storage, such as for transferring files between computers, you're probably better off with a flash memory device (a.k.a., "jump drive" or "USB key"). If you need large capacity for archival storage, to which you'll rarely need access, consider optical media like DVD+/-R.
Where/how used The second question is how you plan to use the device. If it will stay mostly in one place, a heavier, larger form factor external drive is acceptable. (As you might expect, larger capacity units require larger hard drives, and so are both bigger and heavier.)
If you plan to carry the device around, you'll probably want a smaller form factor drive. These have the added benefit that they typically require only power from the data cable. (You don 't also have to carry around the transformer "brick" and AC power cable.)
Connection options As noted, data transfer between the external drive and your computer is accomplished by a USB2 or FireWire 400/800 cable. (If your computer has only USB1 connections, it will still work. But it will be very slow.)
As noted, some external drives have the capacity to be connected to a wired or wireless router, so that the drive can be shared among multiple computers. Such "network drives" connect to the router via an Ethernet cable (RJ-45 connector).
Bundled software If you plan to use the external drive as a backup for your internal hard drive, it's critical that you pick a model that comes with backup software. As with flossing, nobody backs up data as often as they should on their own; you need an "automatic" process driven by software.
Encryption software is a rarer addition, but definitely needed if you plan to store sensitive information on the drive. For reasons discussed below, storage of sensitive information on a portable may be prohibited by your organization's policies. Check the rules if you plan to store work-related data.
Other amenities As with desktop and laptop computers' internal drives, there are different types as well as capacities of hard drive that may be used for an external unit. SATA drives are faster than IDE/EIDE drives. Faster "spindle speed" (RPM) drives are faster. In most cases, you won't notice the difference.
Connection speed varies according to the interface used. From highest to lowest speed: eSATA, Ethernet, Firewire 800, Firewire 400, USB2. In most cases, you won't notice the difference. (Read more about the connection options for external drives here.) Make sure you choose an interface that your computer can support.
Some vendors offer "shock-proofing" of the drive inside its case. Exactly how much protection this affords is hard to gauge. In general, you should consider your hard drive to be a delicate beast. Dropping it is not recommended. Some drives offer RAID (redundant) storage to counter the effects of partial drive damage.
Benefits and risks to consider
The benefits of these devices are just what you'd expect: cheap storage capacity and, at least for the smaller devices, easy portability. You can use that capacity to back up your primary storage (typically the "internal" hard drive of your laptop or desktop). You can also use it to supplement that storage (e.g., for your extensive collection of MP3s and MPEGs).
The risks are of two types:
Risks to data integrity and availability Portable hard drives can fail just like any other hard drive -- indeed, their portability makes them more likely to suffer from mishaps. The failures are often immediate and catastrophic. While most of the data on a "crashed" hard drive can usually be restored, it typically costs thousands of dollars. (Yes, thousands.)
We recommend your important work data be kept on network files. Network file directories are backed up every night. As noted, most portable hard drives now come bundled with backup software, but it's a rare person who uses the backup software fully.
Risks to confidentiality Portability is both the most important feature and most important defect of these devices. They aren't just portable for you. That's why most organizations prohibit use of portable devices for sensitive information, at least unless validated encryption protections are in place.
If portable devices are used to store your personal information, consider the risks of exposure as well as loss very carefully. It's expensive to recover from identity theft. For work-related data, consult your organization's information security policies about restrictions that apply.
It's worth remembering that one of the largest data security compromises stemmed from a laptop and portable hard drive, both stolen from the home of a government employee who was trying to catch up on work after hours. He doesn't have a job anymore.
Hard disk drive (Wikipedia)
More than you could ever want to know.
The hard drive at 50 (CNET)
A short history of the device.