Don’t Sign Long Term Technology Contracts

Here in Silicon Valley, it’s standard practice to never sign a technology contract of more than one year, perhaps two at the most. We don’t think teachers or professors should, either. Here’s why:

Companies go out of business all the time. Many young technology companies are  designed to “go big or go home” which means, huge sale to a big company or IPO, or bust. Long term business building is typically not the standard plan, especially in the early days. You could pay a lot of money up front and be locked into a company that is in a death spiral unable to invest or improve the product.  The acquiring company may shut down the product.  That sales rep you liked may leave and everyone else thinks you’re too small to care about.  In all of these situations, you’d be stuck with no product and still out all of your money.
Technology changes fast. How do you know your current provider will still be the one you want?  Consider the state of these technologies in 2007 — and consider what might happen in the next five years:

Once a vendor has you locked in, there is zero market incentive to keep your business. They know your “switching cost” is very high — training your staff, implementing the tool, getting out of a contract — and they’re counting on that inertia to keep you locked in; which keeps their company fat, and in some cases, lazy.

Your needs are bound to change. You’ll have more people using the system, you’ll have different IT needs, perhaps you’ll even decide you don’t need the product anymore. Why not give yourself the flexibility to adapt to the future?

5 years is a lifetime in technology products. Literally. We think you deserve the best that technology has to offer today, and we want to earn your business every month by making our product better. It’s what we love to do and it’s what you expect, which keeps our interests aligned. That’s why we never make you sign a contract.  (And we’re still the most affordable classroom response system out there!)
Of course, if you want to buy a year long plan, we’ll automatically discount it by 20%. But longer than that, you should be very cautious about committing yourself to any one vendor. Even if it’s us.
Time is indeed on your side in this one. Don’t commit for more time than you need to to get the very best product for a great price.



  • This is because as you said technology keep changing and disrupting for every 5 years or shorter.