Examine your service contracts – part 2

Last week I talked about why it's so important to make sure your support and service contracts are iron-clad. Here are some suggestions about what to look for.

But first, a caveat: please remember that I'm a writer, not a lawyer. Before you actually go out and do any of this, make sure your corporate attorney has looked over the contract. The advice I'm offering is based on 20-plus years of talking to IT-ers, and it's based on what they say has worked for them. It may or may not work for you.

First, keep in mind that there's a difference between "service" – fixing something if it breaks - and "support," which includes new releases of software or new versions of hardware with new features and functions. In the event of an acquisition, most vendors will continue to fix problems, but few will commit to producing future versions of the product. Unless the company doing the acquiring - your vendor's new corporate parent - is the one making promises about new versions, assume that service is the best you'll get.

Make sure the contract specifies what happens in case the product, or the technology it's based on, or the entire company is acquired. I've heard some customers negotiate one-year (or longer) service clauses; that gives them some time to switch to something else or make other plans. And if that can't happen for some reason, some folks negotiate for a cash settlement that will pay a third party for service just in case anything goes wrong.

Also keep in mind that it can make a big difference if you have an existing support and service relationship with the vendor. In the case of an acquisition, many high-tech companies will continue to support only those customers that are currently paying for it. If you prefer to do your own tinkering in-house, or if you were trying to save some money by opting out of the vendor's support contract, you just might be out of luck.

If the vendor shuts down outright without selling, there's not a whole lot you can do. (While more rare than an acquisition, this does happen.) Some customers have told me their contract specifies that if this happens, they can legally make changes to the product's source code. This allows them to make whatever changes they need to keep the product going in-house until they can switch to something else.

In these troubled times, unfortunately, we can no longer take any vendor's survival for granted. (Well, okay, maybe we can assume that the five largest suppliers will be around for a while, or at least that we'll hear about it in plenty of time if they make other plans.) Smart customers will be proactive in this regard, while we all hope that they never have to invoke these clauses.

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