Not ony is this a single point of failure but it's one they've no control over whatsoever. Same goes for Google/Youtube etc. It's as risky as flying a passenger jet with only one engine.
What are they thinking, why are they prepared to risk everything?
It boggles my mind.
Speaking for myself, running a bakery, I chose MS 365/Teams with regret but accepting that there's nothing else out there with the same value proposition except maybe Google workspace.
They have regional pricing so we get everything for the equivalent of $3.50 per user. Basically no other apps offer regional price - Slack alone would cost about $8 a user.
This includes chat, calls, messaging, 1tb of onedrive space per user, calendar, planner, emails, office, plus loads more.
Sure, it's janky but it basically works. The only thing I've found with a close value proposition (still slightly more expensive even if I limit to just a few gb of space per user) is self-hosted Nextcloud, which is about the same level of janky and requires a tech person or team to set up.
I would not imagine storage to be a major cost with something like Nextcloud. They major cost is going to be the tech person to set it up, and you do not need that many hours to do it. Mostly an initially one off cost will be high, and big upgrades might be a lot of work, but maintenance should not be
It's currently at around the break even point compared to MS Teams. I think maybe $5 a month more expensive all in for the VPS, storage, and backup.
It would be cheaper if I could run on Arm but unfortunately Hetzner doesn't have that in their Asia region yet.