Whilst we may never know, I wonder how this will be received by Google. Accepting liability for data loss is a mine field for software vendors and SaaS vendors alike, because the value of that data could be potentially huge, and typically such agreements either heavily limit or deny all liability for data loss. Most scenarios where data is stolen are due to the weakest link in security - the individual user.

The reality is that economies of scale and competence mean that, in most cases, an in-house IT team will not have the security and backup facilities which comes as part of the package with a service provided by a major vendor such as Google. However, the size of such operations also mean they are a much larger target for hackers.

This issue of control remains a key issue for Cloud/SaaS adoption at the enterprise scale. Vendors will need to provide confidence and flexibility to buyers to capture major contracts.

Ultimately where I see Cloud/SaaS applicaitons winning is not just through reduced cost and lower infrastructure hassles for the buyer, but also functionality. Google Mail already incorporates far more readily functionality which more traditional desktop solutions do not, and the speed of roll-out of new functionality is far greater online than in installed software packages. Evolution to collaborative platforms like Google Wave may well seal the deal - as the decision becomes more than just cost saving.