In SaaS, does trust depend on purity?

In SaaS, does trust depend on purity?

Summary: Will potential customers be put off signing up for Google Apps because they perceive it's just a side venture for Google? If that's a valid argument, what does it say about the trustworthiness of other big brands like Microsoft, SAP or Intuit when they dabble in SaaS?

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TOPICS: Google
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Larry Dignan says that Google is less trustworthy than Salesforce.com or any other SaaS pureplay when it comes to the security and safety of your data:

"... there's a perception difference when it comes to Google Office vs. other players like Salesforce.com. I trust the latter more with my data. Why? It comes down to focus.

"Google Office is a side venture at best. While Google is quite capable I'd be reluctant to put all my data there. If Google loses my data there's no downside for them. If Salesforce or NetSuite blow it, their business will tank quickly. The reputation hit matters."

It's an interesting argument with many repercussions for every other vendor with SaaS "side ventures." Does that mean businesses should be equally wary of entrusting their data to Microsoft, SAP, Intuit and every other established software company that decides to venture into SaaS territory? Certainly Microsoft's abysmal handling of Office Live beta customers lends the argument some strong support. What about hosting companies and telcos? Their commitment seems equally dubious looked at from this perspective.

If true, though, it contradicts all the basic tenets of classic brand management theory, which holds that a big brand like Microsoft, Google, SAP or whatever is valued precisely because of customer recognition and trust. According to Larry, though, "Another thing at work here may be that Google is getting too big. I'm not sure folks would host all of their data with Microsoft either." The argument seems to be that in the SaaS market, brand strategy logic is turned on its head, and the provider you should trust the most is the one whose brand is least established and thus has most to lose if it messes up.

I don't buy it. I'm going to side with Rob Hyndman:

"I think that if Google Office starts toasting data, it will be widely known in a heartbeat, and no one who cares about their data — so, the entire business market Google is trying to reach with the side venture' — will drop it like a hot potato. The venture, side or not, will be incinerated until Google makes amends and wins back trust."

The moral here is that it doesn't matter how big or small you are as a company. In the SaaS business, there are no side ventures. To that extent, Larry's right that the issue is focus. You either make a single-minded commitment to run your operations as if your entire livelihood depends on them, or you might as well not bother. There are no exceptions. In fact, big companies probably have to work even harder to earn customer trust than smaller ones. It truly is purity of purpose that matters.

Topic: Google

Phil Wainewright

About Phil Wainewright

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant.

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  • Data is less secure in-house?

    I am db administrator for http://ikeeperonline.com and customer data security is of top most concern to us.

    What I find is customers who are concerned about security and would rather have their data in house have less secure environment probably about 80-90% of the time.
    Example, if they have in house server, the server is out in open. Easily available to ALL employees and the CLEANING crew.
    This is a big one that no one really thinks about.
    jazzymarketing