security flaw scaring customers away
No one has mentioned how this article purports that some people who might have considered GoogleDocs for their solution will be giving it second thoughts now because a security flaw has been found, but any software, of any type will have security flaws found and fixed. The only way to make sure that doesn't happen is to never change the code (never offer new features) once you've fixed every existing security flaw. Also you'd need to make sure the operating system and other pieces in the puzzle never change (impossible). Finally, this is making a huge assumption that all old security holes have been found and no new ones will be found.
Computers never stay the same, software is always updated, so there will always be flaws.
Whether that is in a cloud or in your own data center or your own desk doesn't change that fact.
Silly that the writer of this article insinuates otherwise.