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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.

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>> 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.

And ARR assumes it's recurring too - it's a metric that (people incorrectly think) shows how good your business is at retaining revenue year-over-year.

If a big proportion of contracts in Y1 get terminated at the end of the 12m period (because, say, the customer forgot to renew) - then the ARR will drop like a rock in Y2.

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