This is a summary of what the majority of MSPs agreed should be in an “all-inclusive” managed services agreement, and what issues you need to determine your POSITION on in advance (for example, cancellation or non-payment penalties) and outline in your service agreement.
These are services that the majority agreed SHOULD be included:
Monitoring of Server and Workstations:
- Event logs
- Disk usage
- Processes and services
- Help desk
Spyware and Anti-Virus Monitoring:
- (Daily/Weekly) scans for spyware and malware
- (Daily/Weekly) updates of software
- Removal of spyware and malware if detected
- Hardware under warranty
- 3rd party line-of-business applications; however, most agreed that the client should be required to purchase a help desk support contract from the software vendor.
Quarterly Meetings and Reporting with These Considerations:
- Do you provide quarterly reviews to re-evaluate the support?
- Are you able to increase their fees if you find they require more support than you originally anticipated?
- What type of reporting will you provide?
Asset Management Which Includes:
- Documenting and tracking of warranties for all hardware
- Documenting and tracking of all software licenses
- Ensuring client has legal copies of all software installed
Connectivity of Printers and Scanners:
- Many said they would include maintenance on a printer, scanner or multi-function machine IF they sold them the device and included a service contract with the vendor (additional fee).
Backup Monitoring would be included, but you do need to determine your position on the following issues:
- Test restores included? If yes, how often?
- Disaster recovery included? To what level?
- Offsite data backup extra?
- Change management
Software Upgrades and Installations, with the following considerations:
- What is considered a minor (therefore included) software upgrade, and what is considered a major upgrade that will result in additional billable fees? You need to detail this in your agreement. Tip: A good way to do this in your agreement is to point out you will give a discount on the following services, then list all of the projects and services you will discount that are NOT covered under the agreement. This way the client sees that these projects and services are NOT included, but they feel as though they are getting a special rate as a loyal client of your managed services program.
- If the client installs software on their own, will they be billed additional fees for supporting that software, or for fixing (troubleshooting) issues arising out of a bad install?
- If the client attempts to troubleshoot an issue with the network and inadvertently causes more problems that require support from you, is that a billable project?
The following items are things that came up in the discussion where those in attendance had various opinions. Bottom line, you need to take these into consideration and define what your position is on each and then CLEARLY DEFINE in your managed services agreement what IS included and what IS an extra, billable activity to the client:
“Major Projects” Definition:
- What work, support, or activities would be considered major projects resulting in additional billable hours?
Installing & Purchasing Hardware:
- If the client doesn’t buy the hardware from you, will you support it under your current agreement? Install it? If so, what is the additional cost to the maintenance agreement?
- Is the installation of new hardware included or considered billable project work?
- If you don’t install it, will you support it? Will you take responsibility for warranty work?
- Will you provide support? If so, what level of support?
- Do you require your client to purchase a service contract with the vendor?
- Will you act as a liaison for problems, upgrades, or installations?
- Extra fee for the service, or included?
AUP (Acceptable Use Policy)
- Will you create one for the client and require them to abide by it?
- Will you provide training to the staff? If so, how often and in what format?
- Are you responsible for enforcing it (locking down workstations, content filtering software, etc.)? If so, to what level?
- If the client violates the AUP you put in place (disables anti-virus for example) are you still responsible for the clean up or is that considered billable work?
- Does a client have to purchase all hardware and software from you?
- Do you require the client to use your backup solution, or will you support what’s in place, especially if it’s working, even if you don’t think that their solution is the easiest to support?
- If the client has pirated software, do you require them to purchase a legal copy?
- If the client is running with out-of-date software or hardware, will you still support it or do you require the client to upgrade?
Technician Dispatch – No Problem Found:
- If the client requests support and a technician is dispatched but finds no problem, is that billable?
Are the following miscellaneous services included? If yes, to what extent?
- User training on Office applications
- Vendor management
- Help desk
- Mobile devices
- ISP management
- Employees using home computers to access the network – do you provide support for the home machine?
- Handling the ordering and replacement of hardware under warranty
- Additions or changes to the network (new servers, workstations, etc.)
HaaS & SaaS Offering and Support
More MSPs are moving to a model where they include the software and hardware for a computer network. Usually this means they will replace the hardware and devices, such as workstations and servers, every 3 years or as needed. Usually the MSP retains ownership of these machines, and if a client cancels, they are given the option to purchase the equipment.
There are a lot of reasons why MSPs are moving to this model. First, it makes the client more dependent on the MSP, increasing loyalty. It also allows the MSP to standardize the vendors they work with, making it easier for their technicians to support a client (they only need to master ONE anti-virus instead of learning how to support 5 or 6 different vendors, for example). Additionally, it prevents the MSP from having to support old devices that cause a lot of problems and trouble tickets.
How MSPs price this and what they include varies greatly. Some take over the ENTIRE network including all workstations, servers, laptops, printers, scanners, etc. Some only provide this type of service with the desktops and require an additional fee for servers and other devices. Some include all software, excluding line-of-business or specialty apps, while others simply include certain specific software, such as anti-virus, spam filtering, and hosted Exchange.
What Are Your Guaranteed Response Times For:
- Emergency (Also, what is considered an emergency?)
- After hours & weekends (included or extra?)
Disaster Recovery and Business Continuity Planning:
- After a fire, flood, natural disaster, theft, or employee theft, are you responsible for rebuilding or restoring the network?
- After a power surge, are you responsible for bringing the network back?
- Data recovery: is it considered billable work or included?
Limited Liability: Make sure your contract covers you from consequential, indirect, or punitive damages resulting from the items below. This is a very important contract term that you do NOT want to leave out and should consult with a licensed attorney to assist you in developing:
- Client passwords you and your team have access to
- Software licenses (illegal copies installed)
- Confidentiality of clients’ data
- HIPAA compliance
- SOX compliance
- PCI (credit card)
- Other industry regulations
- Loss of profits or business interruption due to downtime or loss of data
Tip: A common client request is that the MSP has unlimited liability for breaches of confidentiality; that means if the MSP discloses the client’s information, they should be open to consequential damages. This is because (i) the information is considered highly valuable and confidential, and (ii) most damages that flow from a disclosure like this are consequential, not direct. It’s standard to give on this point.
On issues such as HIPAA or SOX compliance, a MSP should never accept terms from a client that make the MSP responsible for the client’s compliance with these regulations, or that say that the services and products provided are “HIPAA-compliant” or “SOX-compliant.” The statutes aren’t written that way, so you don’t want to take on liability that isn’t yours. You can say that, to the extent such statutes apply to you, you agree to comply with them. This is perfectly acceptable; but be aware that this opens the door to having the government and your client sue you if you violate the law. That said, it’s a common industry-standard risk to take, just like doctors take risks when treating their patients. That is why you want to make sure you have adequate insurance coverage for Errors and Omissions, as well as general business liability coverage. Please consult with a professional insurance agent on this matter to make sure you have proper coverage.
Software bugs or other 3rd party solution defects: If you are selling third-party software via license resale, you want to determine how problems, bugs and support will be handled.
Remote Offices: If the client has a remote office that requires you to provide onsite support, are they responsible for paying for:
- Remote hands?
- Travel costs?
Assignability of contract:
- If the client is bought out or merges with another company, are you held to the same contract? Currently, the Master Agreement states that the client may not assign the contract. If the client merges and ceases to exist, however, this can’t be stopped. Clients will be very reluctant to give up control in this area. If you are concerned about this, state in your contract that if the client merges and becomes X% larger, then the pricing terms of the Agreement would be re-visited.
The following items are contract terms that you need to decide your position on AND check with a qualified attorney in your state to make sure you are following state-specific laws:
- Will it auto-renew?
Tip: For a recurring services contract, this is a great idea and will save the MSP a lot of time and effort.
- When are you permitted to increase the price? This can be addressed in an ordering document or in the statement of work. You can reasonably expect to tell clients, even those with auto-renew, that your services are a yearly contract, and the substance and price of the services will change once a year unless the client signs on for several years and pays up-front.
Non-Payment or Late Payment:
Do you charge an interest fee? Is that allowable by law in your state?
- Are you allowed to cut off services for non-payment? The Master Agreement of the Ultimate MSP Contracts currently states that you can cancel the agreement and services provided for non-payment.
- Do you charge one?
Tip: I encourage having one because it gives you a negotiating point when closing the sale. To encourage a “yes” decision, you can offer to waive the set-up fee if they sign before a certain date.
Termination of Contract:
- Do you have an early termination or cancellation fee?
- Does the client have to offer a reason for cancelling?
- How much notice do you require in advance of cancelling, and by what means?
- Is there a cancellation fee for 3rd party software or services you are providing? Usually the answer is “no.” Also, unless there is a warranty claim against the 3rd party vendor, there should be no return of fees paid.
- Are you on the hook for a 3rd party software or service you are reselling? This depends on your agreement with the 3rd party vendor. Usually only the payment runs through you, and the license is between the 3rd party vendor and client.
- Response times
- What percentage of uptime will you guarantee?
- Data recovery
- Satisfaction with service?
Want a 3rd party review of a contract? Call 512-900-9478.
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