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A large business has more of a chance of having some side operation that I don't agree with that gets to share my info.
In the end, I always reach the same conclusion: in a big company my data will be safer. It's more difficult to hack Google's servers, they backup their data more regularly... Yeah, sure, they are a bigger target for any malicious goal, but eventually they'll repair the damage easily.
+ a big company is much more sensitive to its brand image, and will be less tempted to do questionable things to make a quick buck at the expense of their long term potential
+ a big company would generally have more resources to maintain their data centers
The Microsoft/Danger data loss debacle has shaken my faith somewhat.
But when we tell clients about S3 they seem to not trust it - or maybe the don't get it.
I used to work at a local IT company who has a data center and handles client backups. Their differentiation factor is that most businesses trust local establishments first. They know if there is an issue there is someone to call.