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With the rapid changes in technology over the past �ive years, here are ten new things to
consider when hiring a new Managed Services Provider (MSP):
Contract Types
Choose a contracting structure that works for your organization. The following list illustrates the most
common arrangements and under what circumstances they may work for you:
Contract Type
Description
Benefits
All inclusive or
“all you can eat”
Complete outsourcing of the IT function
for a fixed monthly price. Generally, the
price is based on the number of devices
to be managed and includes
subscription services such as email,
filtering, anti-virus, etc.
All responsibility for the performance of
the IT “department” is placed on the
contracted MSP.
Overages on the monthly fees should be
rare, if at all.
Works well for companies with no internal
IT skills.
Block of hours
Montly / hourly
commitment
Client commits to a number of hours of
labor per month on an annual basis.
Subscription services are added on a line
item basis. These plans generally bill
overages as they occur and may or may not
carry hours from one month to the next.
This contract type has become less
popular because remote help desks have
replaced onsite hours.
Bank of hours
Client commits to a purchase of hours to
be used throughout the year. Hours are
expended against the “bank”. If the bank
gets low on hours before the end of the
contract year, the bank must be
replenished.
This technique can be an effective method
for companies that have the first tier of
support and need supplemental
engineering hours.
Also, the hours can be expended on
projects as well as support.
Commitments to various thresholds of
annual hours can reduce the average
rates.
Ad hoc
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This “pay as you go” method is most
common amongst very small companies
that rarely need support.
No annual contract. However, generally
there is no response time guarantee.
Ability to Cancel
Be sure that you can get out of an annual contract without extensive fees and penalties. MSPs vary greatly on
this topic. Some have as much as a three year commitment with hostage clauses in the contract. Some even
have your contract tied to terms and conditions published on their websites that can change without notice.
Also, be wary of terms in which the client company has a short window of time to cancel the contract before
it rolls automatically into a new one.
Regardless of such practices, be sure to ask for a 30 day termination at any point in the life of the annual
agreement.
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Financial Recourse
5
Transfer of subscription services
7
Credit for transition costs
9
On site visits
Ask if your MSP candidate companies will refund your monthly fees if they fail to provide the level of
service expected. To guard against the possibility that the MSP does not carry through on their sales
promises, ask up front for a refund of up to three months if you are unhappy with the relationship. If an
MSP company stands by their service excellence, they should have no issue with this guarantee.
4
Detailed documentation
6
Response time guarantees
8
Transfer costs for data and images
10
Be sure that the selected MSP will take the time to review and consolidate your Internet records, security
certificates, credentials, and all network information into a single document. In addition, ensure that the
MSP will constantly update this document throughout the life of the contract. Even if this document
contains information that you may not fully understand, it is the blueprint for your company IT assets and
you need to hold a copy of it.
Be sure that if you cancel your annual contract, your subscriptions can be transferred to a new MSP
provider. For example, if you have Outlook in the cloud through your MSP, be sure that you can transfer
control of the account to a new MSP. This is also true for any Internet services, mail filtering and bagging,
anti-virus, domain name services, and more.
As productivity in the work place has become more and more dependent on technology, it is important to
get a true guarantee on how quickly the MSP will react to computer issues. With many MSPs, response
times are simply “targets” without any repercussions if these goals are missed. Instead of accepting empty
promises, ask for monetary penalties or service credits if the terms of the agreed upon response times are
not met.
One barrier to leaving a poorly performing MSP is transition cost. Therefore, require your new MSP to
provide a transition period at no cost (usually 30 days). This prevents your company from paying two MSPs
at the same time. Also, be sure that in the case of contract termination, there are no excessive fees for
transferring to a new MSP.
If you plan to host your servers and storage with your MSP, ask in advance for any transfer charges in the
event you want to move them. In particular, pay attention to offsite backups to be held and administered
by the MSP, because over time the amount of storage can be significant. Be sure that this data can be
transferred economically in a timely manner to a new service. This can be true for virtual servers and
computers as well.
As remote monitoring and administration has become more popular and economical, many MSPs charge
extra for site visits. Others resist them at all costs. It is very important to have clear criteria for when site
visits are required by the MSP and at what cost.
Licensing
With the growth of virtualization and cloud services, software licensing has become more complicated. In
some cases, licensing for servers and workstations is held by the client company. In other cases, it is under
control of the MSP. Insist that your new MSP clearly document your licensing so that you can immediately
verify compliance to companies like Microsoft and VMware. Also, this will give you the information to
understand what you own, what needs to be renewed, and what you need to purchase in the event of
contract termination.