3 Things to Look for in an IT Managed Services Contract

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So, you’re ending your contract with your current IT managed service provider and all of a sudden you’re learning about clauses in the contract you didn’t realize existed. When looking for a new IT support provider, it’s a good idea to review any contract you may have in place already that covers your help desk support and network support.

1. Auto-Renewal Clause

Most tech support contracts have a renewal clause that typically indicates that notice of non-renewal must be provided in writing by a certain date before the contract actually renews. And there’s nothing wrong with that–you just have to pay attention to the dates and make sure you’re good to go.

But what happens when there’s a clause that automatically renews your contract with any change–even a simple one? And that change starts the clock running from the beginning of the initial term?

Beware of contracts that indicate that if you, say, add a machine or a user the initial term starts again as if it’s Day One–even if you’re in the middle of your contract. Make sure you know what causes the contract to auto renew and what the term of that renewal is. You may be planning to find a new provider on day 1,000 of a three-year contract, yet find out that because you just added a new user yesterday, your contract auto renewed for three years as of yesterday and now you’re at Day One of a three-year contract!

2. Who Owns Your Equipment?

A well-written contract should address who owns what at the end of the relationship–sort of like a pre-nup before marriage. Make sure you understand whether your equipment is owned (and who owns it) or leased by you. For example, who owns that firewall-as-a-service (FWaaS)? If the equipment is owned or leased to you by the service provider, what happens to it when your relationship ends? Will you be required to buy that equipment? Or will the outgoing provider come in and take out the equipment and leave you high and dry?

3. Are There Exorbitant Offboarding and Cancellation Charges?

Offboarding charges are fairly standard with an IT services contract. But what do they include? Pay attention in particular to when offboarding takes place–is it before the end of the contract or after? If after, how will that impact your company? Will employees be able to continue to work? Will you have any downtime?

What about cancellation clauses? If you cancel the contract before its termination date, are there penalties? And what are the terms of the cancellation? How much notice do you have to give the vendor? Most IT support partners include a cancellation clause of 30-90 days in case of performance issues. Beware of any organization that does not believe they need to earn and keep your business over the term of the relationship.

Source: B2C