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Component breaks due to bug, deployment misconfiguration, scaling failure, etc., and your company loses $1M during the outage. If it's a vendor with an SLA, you

Component breaks due to bug, deployment misconfiguration, scaling failure, etc., and your company loses $1M during the outage. If it's a vendor with an SLA, you can (sometimes) get them to cover the $1M. If it's in-house, you're eating it. It's often cheaper to build/run stuff yourself (unless it's so commodified that you're benefiting from amortization across the vendor's many clients), but then you have to be self-insured for problems.

jcrben 3y ago
I don't think liability payments are that common. As someone who helps in analyzing software purchase decisions, it's certainly not something I hear people bring as a major factor.
- eep_social 3y ago
  Maybe size of enterprise matters? I work in $LargeCorp and legal was very aggressive about insurance and liability redlines on the last contract I had to deal with.
  - deleted 3y ago
    [deleted]
  - jcrben 3y ago
    Why would a SaaS provider expose themselves to catastrophic risk of reimbursing a large enterprise for the enterprise's lost profits due to downtime? I think refunds of the cost of the SaaS are sort of common, but that's quite different and capped. "Oracle offers no financial compensation (e.g., credits, refunds or otherwise) in the event a Service Level Objective is missed." https://docs.oracle.com/en-us/iaas/Content/General/Reference/servicelevelobjectives.htm https://docs.oracle.com/en-us/iaas/Content/General/Reference...
    - eep_social 3y ago
      Look beyond SLAs to topics like cyber security incident liability. SmallSaaS selling to BigCorp, like Oracle, are in a wildly different negotiating position than BigCorp selling SaaS to SmallCorp.
indymike 3y ago
I usually find a derivative of this in the fine print for software contracts: "No Warranty on Software. You and your end users use the Software and any derivative works you may create based on the Software at your own risk." The entire software stack from the bios up generally offers little guarantee, and if it does, it's often: "The sole remedy shall be a refund up to the original purchase price."

jcrben 3y ago

I don't think liability payments are that common. As someone who helps in analyzing software purchase decisions, it's certainly not something I hear people bring as a major factor.

eep_social 3y ago
Maybe size of enterprise matters? I work in $LargeCorp and legal was very aggressive about insurance and liability redlines on the last contract I had to deal with.
- deleted 3y ago
  [deleted]
- jcrben 3y ago
  Why would a SaaS provider expose themselves to catastrophic risk of reimbursing a large enterprise for the enterprise's lost profits due to downtime? I think refunds of the cost of the SaaS are sort of common, but that's quite different and capped. "Oracle offers no financial compensation (e.g., credits, refunds or otherwise) in the event a Service Level Objective is missed." https://docs.oracle.com/en-us/iaas/Content/General/Reference/servicelevelobjectives.htm https://docs.oracle.com/en-us/iaas/Content/General/Reference...
  - eep_social 3y ago
    Look beyond SLAs to topics like cyber security incident liability. SmallSaaS selling to BigCorp, like Oracle, are in a wildly different negotiating position than BigCorp selling SaaS to SmallCorp.

indymike 3y ago

I usually find a derivative of this in the fine print for software contracts: "No Warranty on Software. You and your end users use the Software and any derivative works you may create based on the Software at your own risk." The entire software stack from the bios up generally offers little guarantee, and if it does, it's often: "The sole remedy shall be a refund up to the original purchase price."