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Partial Termination/Termination and Resumption of Support

■ Maintenance and support services are necessary only to the extent the solutions they support are in use. A customer’s business operations, including the demand for its products or services, the types of products or services it offers, and by extension, the services and software it uses in its business, should be expected to fluctuate over time. As such, it is important that the terms of any agreement allow for adjustments in the level of support to reflect changes in the use of the underlying software or service.

  • — Language permitting a customer to partially terminate a portion of its agreement can provide the flexibility necessary for businesses to adapt to fast-changing market conditions. Customers should consider tying their ability to terminate a portion of the services in their Agreements to the termination of the underlying software or service itself.
  • - Maintaining the customer’s ability to terminate maintenance or support services and then resume such services within a specific period of time can contribute to cost savings by reducing the customer’s reluctance to cancel currently unused maintenance or support services.

Specifications

■ It is common for agreements to limit the defects of software or services that are covered under the agreement to those that result in a failure to “substantially perform” in accordance with their then-current published documentation. The claims made in a vendor’s documentation are typically much more conservative than those made by the same vendor’s promotional materials and personnel during the sales cycle. As a result, there may be a significant gap in the functionality a customer has been “sold” and the functionality that the vendor is capable of supporting. Additionally, as each vendor controls the contents of its documentation, a vendor is able to unilaterally revise its documentation under this approach, which may result in significant degradation of the software or service’s supported functionality. Although vendors will resist such a change, customers are on strong ground to insist that significant investment they have made on a solution is supported to a broader standard. Customers should consider language that requires the software or service to perform in accordance with the “specifications.” These specifications should reference an exhibit that lists important functionality as well the terms and conditions of the agreement with the vendor and, then to the extent it is not inconsistent, reference the vendor’s documentation. For example,

Specifications shall mean the specifications and requirements set forth in exhibit a (specifications/requirements), all other performance requirements included or incorporated by reference into this agreement, and, solely to the extent not inconsistent with the above, the documentation.

Availability

■ Customers should carefully evaluate whether their business needs necessitate the availability of support services on a 24/7/365 basis. The availability of such support can make the difference between a prompt resolution of an issue and an extended disruption of service, along with its associated costs— particularly for business critical applications, even if this off-hours support is charged as an additional cost. If a vendor is unwilling or unable to provide such support for their products, that factor should be a significant consideration in the vendor selection process.

Support Escalation

■ It is critical that a customer is familiar with a vendor’s support escalation procedures before a problem arises. The vendor should provide the customer with a detailed description of the escalation of a problem from its first-tier support to second-tier support. The customer should also insist that the vendor provide, and continue to update, a support escalation matrix to be used in the event that a mission-critical disruption requires immediate escalation. The support escalation matrix should identify multiple individuals comprising the vendor’s support management team, along with their contact information.

Service Levels

■ Tire level of service a customer will require, such as for responses and resolutions to issues, is proportional to the criticality of the supported software or service. As vendors continue to offer solutions that serve in increasingly critical roles, they must also be willing to provide higher levels of service to correspond with their customers’ exposure to risk. The following issues should be considered when negotiating the service level of agreements:

  • - A maximum amount of time should be specified for the vendor to respond to a customer’s support request. A “response” should require that the vendor has engaged on the support request; is working continuously to diagnose the corresponding errors, formulate a plan to address any such errors, and execute that plan; and has notified the customer that such support has begun.
  • - It is also appropriate to specify required problem resolution times. Unless the vendor has independent notification of the problem, resolution times are typically measured from the time when the vendor receives the support request until the time the vendor has resolved the problem. Customers should consider negotiating language that defines a “resolution” as both the vendor providing a correction of the problem and the customer confirming that the vendor’s action actually corrected the problem. This approach will prevent the vendor from “resolving” the support request before a problem has truly been resolved in order to avoid defaulting on its service level obligations.

— Vendors of services are often in the best position to learn of a failure or other disruption of service. Their service levels should include an obligation that requires prompt customer notification and automatic initiation of a support request in the event of a problem.

One frequently used technique to mitigate risk in support and maintenance agreements is to choose the highest (and, potentially, second highest) issue categories (e.g., Categories 1 and 2 or Priority 1 or 2) and attach a clear required cure period to those important issues. For example: “If Vendor fails to resolve a Priority 1 issue within fifteen days (and such time is not extended by the written agreement of Customer), Customer may terminate this Agreement on written notice to Vendor as a material, non-curable breach.”

Summary

Maintenance and support services agreements are integral for providing protection following the warranty period. Customers should consider the scope of the agreement, the exact type of support it needs for its software and services, and how to draft an agreement that obligates vendors to provide the appropriate level of support.

 
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