Structure 2010: Let My Data Go: Why Total Freedom Is the Real Lock-in

If you want to lock customers into your service, get ready to hand them the keys to their data. That was the point hammered home in a talk today¬†at GigaOM’s Structure conference that included SugarCRM CEO Larry Augustin, Eucalyptus Systems CEO Marten Mickos and Kim Polese, founder and CEO of SpikeSource.

The most successful vendors of software-as-a-service, or SaaS, according to Mickos, will be those who can offer a model similar to banks. “Today we put our money in the bank because we know it’s safer there than at home,” he explained, and because we’re confident that at any point we can withdraw our money. “That apparent lack of lock-in is what creates the real lock-in, which is loyalty from the customers.”

Augustin described a scenario where this would matter in the marketplace. “If all your data is at one place in the cloud, and all of a sudden that data goes away,” (due to a power outage, for example, as small businesses relying on Intuit’s services experienced first-hand this month), then you lose all access. But with a more open SaaS model, you could run a local copy or “go over to a cloud service provider for a day or two,” said Augustin. “Of course, you don’t just need the data; you need an application that can get to it.”

Eventually, Mickos predicted that customers will demand the same sort of freedom with their data that we currently demand from banks when it comes to our savings. “I would like to go to Google and say, ‘Give me all the searches I’ve ever made, and stop using them,'” he said. “But I can’t.”

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