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The EU Just Killed ARR

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Re: The EU Just Killed ARR

#51

Post by bilekas »

flowerbreeze wrote: post #26

As a user, this is great news. I think that the artificial lock-in to services that have near zero cost of on-boarding and off-boarding is not what nice companies should do. As an entrepreneur, this is amazing news! This means users can now more easily switch to my superior service. At least this is how I choose to see it. It seems to encourage healthy competition and I'd rather compete on the service quality and val…

Absolutely, companies who remain stagnant will fall behind if they don't offer something as good as or better than competition. Only shareholders who are concerned about "guaranteed income" regardless of its sources will not like this imo.

Re: The EU Just Killed ARR

#52

Post by [deleted] »

StopDisinfo910 wrote: post #17

What a complete misrepresentation... Limiting notice period to two months and forcing you to give customers the possibility to terminate at any time is not killing ARR. It might moderately increase churn but even then, unless you are frankly dishonest, not that much. You still have ARR when your customer can terminate their contract. Even yearly discount which the article presents as done for are still a thing with t…

[deleted]

Re: The EU Just Killed ARR

#54

Post by basisword »

throwoutway wrote: post #27
StopDisinfo910 wrote: post #17

What a complete misrepresentation... Limiting notice period to two months and forcing you to give customers the possibility to terminate at any time is not killing ARR. It might moderately increase churn but even then, unless you are frankly dishonest, not that much. You still have ARR when your customer can terminate their contract. Even yearly discount which the article presents as done for are still a thing with t…

I agree the article seemed disingenous and almost felt like it was shady (can you believe the EU lets them cancel in a sane way?!). When I hear ARR, I don't think of an annual contract. ARR is equivalent to MRR*12 and can be a mix of contract types or even utility spend ($ per bytes). I understand that "committed spend" is when a business agrees to pay $XX annually, but that's not defined by ARR.

>> ARR is equivalent to MRR12

Sure but if you actually have customers paying the annual fee in one go (instead of 12 monthly payments when they can cancel at anytime) the ARR number will be much more reliable. With MRR12 you're counting people who sign up for a month and quit.

Re: The EU Just Killed ARR

#55

Post by StopDisinfo910 »

jolmg wrote: post #10
deadbabe wrote: post #6

Earlier quoted context omitted.

I think you could still do it but it would involve some clever financial engineering.

Prepaid annual (or 3-year) contract. No refund once period started. I think that's how it's generally been. I don't see how this changes things.

I don't know how the law is framed but generally no refund is illegal because it would be too easy to create loopholes in the law otherwise.

What's customary is forfeiting any discount, then a partial refund with eventual early termination processing fees.

So if you had an annual subscription with a 10% discount which you stop after 3 months, your refund would be what you have paid minus three months at full price plus a token processing fee. It's a very common setup for mobile phone and internet subscriptions here. You generally end up paying roughly the equivalent of one additional month when you cancel which competing providers often actually refund when you switch.

Re: The EU Just Killed ARR

#56

Post by basisword »

mytailorisrich wrote: post #43

The EU trying to solve a non-existing problem. If a company offers a discount (or not) for a longer minimum term contract and you accept then that's just liberty in action as long as the terms are made clear in advance. There is neither a need nor benefit in regulatory intervention, especially considering all the actual issues on Europe's plate...

>> The EU trying to solve a non-existing problem.

It's a problem for me and as an EU citizen I'm happy they're taking the time to solve it.

Re: The EU Just Killed ARR

#57

Post by mytailorisrich »

StopDisinfo910 wrote: post #55
jolmg wrote: post #10

Earlier quoted context omitted.

Prepaid annual (or 3-year) contract. No refund once period started. I think that's how it's generally been. I don't see how this changes things.

I don't know how the law is framed but generally no refund is illegal because it would be too easy to create loopholes in the law otherwise. What's customary is forfeiting any discount, then a partial refund with eventual early termination processing fees. So if you had an annual subscription with a 10% discount which you stop after 3 months, your refund would be what you have paid minus three months at full price pl…

No refund is perfectly legal. Just continue to offer the service/product, i.e. cancellation only takes effect at end of term as was contractually agreed.

Re: The EU Just Killed ARR

#58

Post by jorams »

This article is just a lie and also seems deeply confused. First it talks about the (false) claim that you can no longer count a yearly contract as such, then it switches to "involuntary churn" without at any point explaining why those concepts are related in any way.

The regulation[1] explicitly says:

> Nothing in this Regulation prevents a customer from compensating third-party entities for support in the migration process or parties from agreeing on contracts for data processing services of a fixed duration, including proportionate early termination penalties to cover the early termination of such contracts, in accordance with Union or national law.

[1]: https://eur-lex.europa.eu/eli/reg/2023/2854/oj/eng

Re: The EU Just Killed ARR

#59

Post by myrmidon »

refulgentis wrote: post #38

30% of the corporate blog links on HN the last 4 weeks have mysterious distance from the facts they purport to relay. Then, they pivot to something vaguely related that is more fun to talk about. The distance is never closed, and then you're hit by the ur-slop: "That's not X—its Y" and realize where we're at: it used to be a good idea for SEO to write informative blog entries, then it got outsourced from subject matt…

I'm curious if AI writing style is going to leach into human use and possibly even self-reinforce.

I also really don't understand why it is apparently so difficult to teach LLMs not to repeat the same sloppy sentence style multiple times per paragraph...

Re: The EU Just Killed ARR

#60

Post by mytailorisrich »

basisword wrote: post #56
mytailorisrich wrote: post #43

The EU trying to solve a non-existing problem. If a company offers a discount (or not) for a longer minimum term contract and you accept then that's just liberty in action as long as the terms are made clear in advance. There is neither a need nor benefit in regulatory intervention, especially considering all the actual issues on Europe's plate...

>> The EU trying to solve a non-existing problem. It's a problem for me and as an EU citizen I'm happy they're taking the time to solve it.

How is it a problem? Any bad software companies put a gun to your head to force you to buy their products on their terms?

I am an EU citizen, too, and I would like that the EU do not intervene and regulate anything and everything they might think of just for the sake of justifying their jobs...

B2C in Europe has very strong consumer protection laws, so terms must be clear and fair. People can then make their own decisions. B2B has less protection, i.e. you're supposed to be clued-up a minimum to read and understand contracts, but then people can make their own business decisions, too.

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