[smacktoward]

Yes, but most of these companies are selling services, not products. If I was buying a downloadable software product from them, the you-got-your-pie analogy would be more apt; sure, the company went out of business, but I still have the product I bought and can continue to use it. Services don't work like that; when the company goes away, the product goes "poof" and disappears. Even if you paid in advance for long term use of it! Which makes people confused and/or resentful.

This is the downside of the Everything-As-A-Service model: services are a commitment. Customers aren't buying a product, really, so much as they're buying a relationship with you and your team. The only way you can sell a relationship is by convincing people that you're serious about it -- that you're in it for the long haul. So if the next week you announce that you really weren't...

[patio11]

In selling actual services to businesses -- the kind they pay tens of thousands for -- they'd often prefer to have a relationship with you. And you do have a relationship. It is a professional relationship and governed by contracts. They owe you what is written in the invoice, you owe them what is written in the SOW, and after acceptance you're square.

This actually comes up in negotiations. "We'll need a follow-up engagement in six months." "I might be available for a follow-up engagement in six months." "Can you guarantee it?" "I am amenable to selling you a guarantee." "Selling a guarantee? We don't want to pay extra. We just want to schedule an engagement six months from now, if we need one." "In that case, you can wait five months and ask to schedule an engagement. I'll generally try to slot you in, subject to my then-prevailing rates and availability."

I think you think that using a SaaS gives you a free option on service next month. This is... an unusual understanding of how business services work.

If you absolutely need continuity of service that is something you can buy. Many HNers do not understand that it is really freaking expensive. If you are paying $29 a month and don't remember signing custom language guaranteeing it you probably have not bought it.

[Silhouette]

I think you think that using a SaaS gives you a free option on service next month. This is... an unusual understanding of how business services work.

That might be true technically, but it's certainly a common expectation among organisations that use SaaS offerings.

Moreover, it is a necessary expectation for many of those services to be commercially viable. Frequently the time and resources invested in integrating someone else's service will take a significant period to generate a net positive return and outsourcing will incur a significant degree of risk. If decision makers didn't have a good faith belief that a service they were planning to integrate would remain available for a useful period of time, approximately no-one would ever sign up in the first place.

Obviously many businesses do offer services that, according to their fine print, do not provide any such guarantee. They rely on their potential customers either not noticing or not caring enough to prevent them from buying.

(If you disagree, then if you'll forgive me for using a personal example for a moment, I invite you A/B test Appointment Reminder's current home page against a factually accurate version that does not make any claim that is undermined by the fine print in your Terms of Service. For example, instead of "Clients get a reminder call or text message prior to their appointment" in your main graphic, you could write "Clients might get a reminder call or text message prior to their appointment, or they might get it late or not at all.")

IMHO, current trends like launching MVPs and exiting via acquihires are therefore poisoning the well. Potential customers of future services will, quite rightly, be suspicious of those services' reliability and longevity, and otherwise viable businesses may fail purely because of trust issues.

In the interests of fair disclosure: My own businesses depend on very few such services, and without any exception I can immediately think of, either those services are conveniences rather than critical to business operations or their providers have given legally actionable guarantees about their intentions/exit scenarios.

[patio11]

I wasn't going to mention it, but since you asked, my answer when somebody asks this for AR on the publicly available plans is: "I have been in business since 2006. AR has been my main product focus since 2010. I don't have any current plans of exiting the business any time soon. At the same time, I'm a one-man operation. If you were to say you feel less sure that I'm going to be around than $COMPETITOR, I'd say you're probably right. I'd also say that you can always get me to answer your email and their CEO wouldn't even know much less care that you exist. Your call." ($COMPETITOR is a well-known company in the space with eight figures in revenue whose minimum buy-in is close to the maximum I've ever charged a client.)

If you were on one of the non-publicly-available plans, you'd get language similar to "Vendor agrees to provide services as per the attached Statement of Work for the Contract Term as specified in the attached Statement of Work." That means exactly what it and related contractual terms say. It isn't like continuity of service is something that e.g. hospital systems suddenly realized they needed in 2004. They quite literally have similar contractual guarantees written in their contract for garbage disposal.

[Silhouette]

You rather deftly sidestepped my main point there. :-)

Again, I don't really want to focus on Appointment Reminder specifically because obviously it's not as if you're running the only service in the world that does this, but it does make a good example here. Objectively, almost every major claim on the Appointment Reminder home page -- meaning the things that really matter to a prospective customer, including literally the entire benefit someone would get from signing up to use the service -- is undermined by the wording in the Terms of Service.

It may be true that if someone asks explicitly then you give them an honest answer about your situation. I've certainly no reason to doubt you do. On the other hand, does an average small business outside the start-up world actually ask? I can't imagine anyone working the reception desk at my dentist or optician is going to be sufficiently aware of the legal and business environment to consider that a service advertised as Appointment Reminder is might not actually promise to do anything of value at all.

At this point, AR is becoming a bad example, simply because by its nature it falls into the category I described as being convenient but not critical. (No slight is intended by this comment, but I imagine any business that has so many missed appointments that it would be in serious trouble without AR has bigger problems than anything we're discussing here.) However, if we were talking about a service that hosted the professional's calendar of appointments, or their CRM database, or their payment system, and these services were known to be at significant risk of disappearing overnight, how many other small businesses would really sign up to use them?

[patio11]

I'm attempting to avoid engaging in your main point, because it would require taking notice of the accusation of fraud.

On the other hand, does an average small business outside the start-up world actually ask?

No. They don't ask for AR's continuity plan, for the same reason they don't ask for their accountant's continuity plan, or their lawyer's continuity plan, etc. Would the good doctor prefer to deal with the same accountant every year, to avoid having to re-explain every decision made in 6 years to a new accountant? Certainly. Are there accounting firms who they could purchase ongoing services with contractually guaranteed continuity from? Yes. Dr. Carter's Dental Office is welcome to call up the Big Five any time Dr. Carter gets worried about his good buddy Ralph closing up shop before tax season next year. He doesn't, partly because he prefers Ralph to the Big Five, and partly because the Big Five is way the heck out of his price range. Dr. Carter and his team of professionals are, in fact, actually in business, and they're fully capable of making decisions like this. If you're of the opinion that Appointment Reminder is the first time Dr. Carter got into a services relationship you're wildly mistaken.

(n.b. I spend about as much on accounting as a small dental practice, and have a great working relationship with my accountant. I also read my contract with him prior to signing. It has specific contractual language about termination which is effectively identical to AR's.)

[jschulenklopper]

Good example on the Big Five: they became known as the Big Four after the demise of Arthur Andersen in 2002 :-)

[vvvv]

A reference point from providing critical (revenue generating) business services: it's typical for a customer to go through our financial accounts and collect references pre-signing to get an idea whether we're likely to be around for the duration of the contract and beyond.

[Silhouette]

I'm attempting to avoid engaging in your main point, because it would require taking notice of the accusation of fraud.

Fair enough. I hope I've been clear that my purpose here is not to single out AR or direct any criticism at you personally for how you run your business. AR is hardly the only place on the Internet, or indeed in bricks 'n' mortar stores, that says one thing in big letters in its marketing and something rather different in little letters on its terms page. I'm just giving an existence proof that this happens, to counter the position that customers of SaaS businesses should have no expectation of continuity from month to month just because someone's terms of service say there are no guarantees; I consider that argument unrealistic, and therefore a weak counter to the suggestion that customers might reasonably be upset when a service they invested in integrating and may have come to depend on in practical ways was bought out and shut down because of something like an acquihire.

There is an interesting discussion to be had about the best way to deal with the inevitable conflict between giving a fair but inevitably brief and informal description in marketing and having full and legally appropriate terms for actual contracts. This is something I've talked about several times with lawyers, and we generally have a somewhat different strategy to many US companies in this respect, but then we're not in the US and the legal climate here in the UK is somewhat different as well. I do understand that as someone posting with a well-known identity you might not consider this a suitable venue for such a discussion, interesting as it might otherwise be for all concerned.

They don't ask for AR's continuity plan, for the same reason they don't ask for their accountant's continuity plan, or their lawyer's continuity plan, etc.

Sorry, but I think that is not a fair comparison. I don't know the specifics in your jurisdiction, but it is common for professional standards bodies to require basic business continuity arrangements for accountants and lawyers of any level and dealing with clients of any level, and in most places in the first world these are regulated industries where it is literally unlawful to practise without holding the relevant qualifications and complying with the relevant professional standards.

So, if Dr. Carter's favourite accountant is taken ill and unable to continue working, it should be straightforward to transfer the necessary information to another accountant and have them take over with minimal disruption. The ability to file the doctor's accounts isn't just going to disappear overnight because the principal at the accounting firm got hired in a senior position at Deloitte.

There would normally be no need for Dr. Carter to spend crazy money on a Big Four/Five accountancy firm to ensure this basic level of protection. (This is rather fortunate for everyone else in the accountancy business.) Of course larger organisations with more demanding requirements involving many hours of work from whole teams of people on both sides might want stronger guarantees from the larger services organisations they deal with, and those will usually be available from the larger services organsations, and there will usually be additional fees involved. But approximately no-one who's using the kind of SaaS offerings we often discuss on HN is operating on that scale and at significant risk of the entire company providing the service they rely on being subject to an acquihire.

[bhewes]

Windows XP being an example of something corporations paid millions to keep in service.