Read the Contract

Don’t Be Fooled By the Presence of an SLA

The majority of Service Level Agreements (SLAs) are designed for one purpose — and one purpose only — to give you a false sense of security that will cause you to overlook the fact that the wording insures that the vendor will be able to keep your money for the length of the contract, no matter what. Your average SLA will run for a dozen or more pages with lots of fancy wording around “Level 1” problems, “Level 2” problems, and so on with detailed text spelling out your responsibilities and consequence-free reprieve time for the vendor while you lodge your complaint and fill out the necessary documentation.

When you take out all the superfluous text and boil it down to the essentials, you quickly find out that your average SLA is toothless and promises very little. While there may be a process for every issues that could arise, the language will always be sufficiently vague that a lawsuit couldn’t be filed, as a case couldn’t be won, nor would it be worth your while to do so. And it’s a waste of time to argue it, as your vendor’s attorney’s will be just as good as yours, and for every point the vendor’s attorney concedes, he’ll introduce two more that could be used to screw you even worse in the long run.

The ideal SLA, and the only SLA with value, is one that allows you to terminate the contract at any time without leaving any money on the table under a pay-as-you-go kind of contract. (That’s why SaaS solutions can often be the best value for your money as many SaaS vendors will allow you to go month to month after a minimum period of time.) This is the only SLA that counts as the vendor understands that unless it keeps delivering a quality product backed by quality service that earns your business, your business is something it might not keep. There is no stronger incentive to a vendor than your ability to walk away.

There’s No Such Thing As A Free Lunch

Free modules? Free support? Free training? Not likely! Either it’s included in the price, is being offered as an enticement to lock you in for a fixed term, or it’s being offered in an attempt to divert your attention away from a complex SLA that benefits the vendor and not you. If you want the extra module, extended support, or training, offer to buy it a-la-carte instead. Anything that ties your hand contractually is not only not free, but very, very expensive — especially if it locks you into a long term commitment to a solution that doesn’t deliver the results you expected.

Don’t Get Fooled by the License Fee in Disguise

Many traditional enterprise software platforms have a clause buried deep in the SLA that requires you to pay the annual maintenance fee, or lose the right to use the software altogether even though you have years left on the contract. That’s not a maintenance fee, that’s a license fee. Make sure the maintenance fee is a real maintenance fee for support and bug fixes. If you’ve licensed the software, and paid six or seven figures to do so, you should retain the right to use the software for as long as you desire, even if such use doesn’t come with free assistance.

Don’t Get Screwed By The New Release

As sure as the sun rises in the east, the vendor will come out with a new release not long after you’ve bought the current version and expect you to pay a large tranche of money to get it. You may get offered a small “upgrade” discount, but you’ll pay, then pay again, and pay again, and again for as long as you own the software. If you can’t do business with a vendor that simply charges you a fixed, steady, predictable monthly rate for the software — with no surprises — consider at least going with a vendor who will fix the price of the upgrades up-front. At least you’ll be able to plan for the expenditure and know up front how much the software is really going to cost you over its lifetime.