What impact on European SaaS startups and scaleups?
France
Designed to facilitate switching cloud providers and accessing data from connected devices, the Data Act could have a harmful side effect for SaaS companies.
If we had to tell you what really hits the mark, in just a few lines:
Designed to make it easier to switch cloud providers and access data from connected devices—which we welcome—the Data Act could, according to an interpretation by the law firm Bird & Bird, have side effects for SaaS startups: allowing any contract to be terminated after just two months, thus complicating the estimation of recurring revenue.
If this were the case, the consequences would be significantly detrimental to the business model of SaaS startups.
The contractual changes required by the Data Act would make it impossible to accurately forecast their ARR, thereby undermining their business model and, consequently, weakening their ability to attract investment and maintain market valuation.
Imposing these rules would also be disproportionate: the main goal of these regulations is to enable switching cloud providers and data portability—services that SaaS startups and scaleups already offer their clients.
We therefore call on public authorities for rapid clarification, because it is in uncertainty that ground is lost.