IT maintenance contract

What is a service contract?

A service contract is an agreement between two or more businesses that define the terms and conditions of an IT maintenance contract. The parties agree to abide by specific terms and conditions, while respecting the other businesses requirements.
Maintenance contracts are commonly seen in the IT industry as long-term, fixed-price commitments. However, a maintenance contract not only applies to hardware and software, or equipment maintenance; it does include the costs of and generally guarantees fixing minor problems or repairing lost or stolen equipment.
A maintenance contract does require the client to sign a contract covering certain service levels and limitations. This contract must clearly outline the items and limits of support, and it must be reviewed annually to ensure compliance.
There are many different types of service contracts, but the one that we discuss in this article is referred to as a „IT maintenance service contract“.

How to structure a service contract?

For example, a maintenance contract and software service contract typically includes, and generally consists of several parts:

  • A clause outlining the scope and frequency of the client’s maintenance
  • A commitment to cover the service level issues raised during the contract
  • A clause outlining the scope and frequency of the client’s tech support requests
  • A clause detailing the client’s expectations around tech support provision
  • A clause outlining the scope and frequency of the client’s other support requests
  • A clause outlining the scope and frequency of the vendor’s other service requests

This means that, in these contracts, the vendor clearly defines the scope, frequency and commitments of its tech support requests and the client expects support issues and commitments to be addressed in time. In addition, companies often enter into contracts for software maintenance and upgrades. Software and maintenance contracts typically include:

  • A fixed price
  • A term and commitment
  • A statutory renewal
  • A service contract renewal if the contract is to be continued






Exclusions

Based on certain vendors, equipment, and customer needs, in addition, a maintenance contract may for the sake of being more cost efficient exclude:

  • Support outside of scheduled maintenance
  • Remediation outside of a planned repair
  • Repairs outside of a planned replacement
  • Equipment maintenance contracts

Confusion in long-term contracts

Asking for commitments outside of a typical maintenance contract are particularly attractive when it comes to supporting legacy IT systems. However, asking for a commitment outside of a typical maintenance contract can be a daunting prospect for new staff and customers. New staff and customers often struggle to differentiate between what is being covered and what is not, and what activities are covered and what activities are not covered. Even though a maintenance contract typically defines the scope and frequency of the client’s maintenance, it is often difficult to discern which activities are covered and which are not when the scope and frequency of the service are not clearly outlined. Invoicing outside of a typical maintenance contract can also be a daunting prospect for new staff and customers. Unlike services, which are typically covered by the contract, equipment maintenance contracts generally exclude the equipment itself from the contract. In other words, an equipment maintenance contract does not require the client to purchase equipment maintenance services.
Most vendors do not differentiate between term and commitment clauses in their software maintenance contracts. Instead, they assume that all maintenance contracts include all of the same language, and that all renewals include the same language as well. Many vendors also include an employee benefit agreement in their contracts, which sets out the terms and conditions of reimbursement for certain service level issues, such as those caused by equipment breakdowns or theft. However, many IT maintenance contracts only include these terms, leaving the employee benefit agreement as an afterthought.
However, we include term and commitment clauses in procurement contracts for most industries, such as those between a manufacturer and a third-party vendor (B2B). By including these clauses in the contract, we better understand what activities we can expect from our clients, and how to set terms that are fair, reasonable and in our client’s best interests.







Annual reviews

In the IT industry, an annual review is a must if you want to stay current with the latest technology. Reviewing equipment, software and services regularly will give you a better understanding of how your technology works, and how to best configure it to meet your requirements.
An annual review will also give you a better understanding of your IT system maintenance contracts and their terms and conditions.

A better maintenance service contract

We mitigate the downside of typical contracts, which for an IT maintenance contract is that it sets a low ceiling on the hours that the client can expect with a maintenance contract. Under normal circumstances, an IT maintenance contract would entitle the client to a fixed number of hours per month. Instead, our service entitles the customers to have the option to increase or decrease the hours based on their circumstances. However, our flexible solutions enable the client to a choice of shorter or longer, on-site or return maintenance contracts. We promise you that confusion does not exist with our clear IT maintenance contracts.

Contact us

Contact us if you are interested in our solutions. One of our employees will evaluate your ideas and provide first consulting. After that, we will send you an offer that is optimized for your specific needs.

Phone: +43 1 8698400

Email: office@iphos.com

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