MSP Vendors Turn the Contract Screws

 
 
By John Hazard  |  Posted 2007-04-04 Email Print this article Print
 
 
 
 
 
 
 

Several managed-services platform vendors are turning the screws on their Managed Service Providers with tough language and unfair consequences in their reseller contracts, says the industry group MSPAlliance.

Contracts with several of vendors, including some of the most familiar names, stipulate that MSPs stick to a defined territory and meet sales quotas or hand over their customers, said Charles Weaver, president of the MSA. But partners sign up anyway and may pay the price later, he said.

The contracts create a situation in which the vendors have their cake and eat it too. MSPs are boxed into territories and put against the wall of numbers, and risk losing their customer base.

"It's an uneven playing field," Weaver said. "For those MSPs who have experienced these, it's like 'You should be lucky to even sell this and if you can't meet your numbers or sell outside your territory, those clients you were selling to now belong to us.'"

For its members, the Alliance said it is urging MSPs not to sign such contracts and, if they have to, to seek legal guidance. For vendors, many of which are Associate Members of the group (Weaver declined to identify any by name), the organization is lobbying for fairer standards.

It has also unveiled standard boilerplate language for both parties to use as a guide.

The next step, Weaver said, is collective pressure.

The issue stretches beyond fairness to being one of ethical obligation, he said.

"As an MSP consumer, I don't think I want my MSP taking its marching orders from a vendor," Weaver said. "I want to know that they put my best interest first."

The Alliance has worked to instill professional standards, similar to those lawyers and accountants work under, in managed services.

If your practice has seen such a contract, let Channel Insider hear about it. Write me at jhazard@ziffdavis.com.

 
 
 
 
 
 
 
 
 
 

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