What Is a Managed Service Agreement
April 13, 2022 | Katy Yanossy
This section states that the service provider and its representatives do not disclose a customer`s information. The exception only applies if it is necessary to provide the contractually agreed services. Otherwise, the MSP protects the information from unauthorized use. A well-prepared managed services contract: Make sure you are not held responsible for any loss or damage beyond your control. The pandemic is a great example of how external forces beyond your control can quickly impact your business and customers. It is important that your managed services contract takes these potential changes into account and clearly defines the expectations of the business relationship in times of crisis, including what customers should expect. These terms also define how your MSP is protected. Pricing models are often used in managed service contracts. In general, these are based on different metrics to put a real number on the value of the services offered.
Misunderstandings and potential disputes may arise if the contract does not clearly describe the pricing conditions and measures. The services provided for in the contract should be directly linked to the costs expected by customers. Intellectual property rights continue to be a national and international issue in the business world. A solid service contract must take this fact into account, not only for the supplier, but also for the customers. At no time during the term of the contract shall the interests of one party adversely affect the interests of others. Both parties reach an agreement with the determination to protect their intellectual property rights. Access to certain information and knowledge of what happens to that information during the course of the activity is essential to maintaining this protection. An MSP can customize software as part of managed services. An MSP who wants to use the software code for other clients must ensure that the MSA clearly states that the MSP owns the copyright in the literary work that is the software code, otherwise the MSP will be excluded from a potential source of revenue. In this scenario, the MSP grants Customer a non-exclusive, non-transferable, non-sublicensable license to use the Software for the duration of the provision of the Services. The content of an MSA varies depending on the services provided, the relationship between the MSP and the customer and the content of the associated service documents, but the usual clauses include: At KR Group, we review the contract with you before registering for our services, and we recommend that you also read it in its entirety. If an MSP hires subcontractors for one of its services, the managed services contract must also specify what customer information can be shared with them.
While every business is cautious about protecting important information, some customers may be required by law to ensure that the data they store is secure. For example, HIPAA medical practices are required to protect patient information, and any company that processes credit cards electronically must adhere to PCI-DSS. The MSP undertakes to provide its services in accordance with an agreed scope of work, in which the nature of the services, specifications and all assumptions, exclusions and dependencies must be clearly stated. MSP is required to present them carefully so that there are no misunderstandings among its customers about exclusions and any liability is avoided if the MSP is based on certain assumptions and dependencies. For example, the provision of services may depend on the customer not changing its network architecture, as this may result in the operation of certain services, such as applications. B, in accordance with interoperability or interoperable specifications. Changes to the ACL – service providers for the use of mandatory formulations. On the managed services side, these longer run times give you the ability to know your MSP without the pressure of an extension. Several points are crucial for the creation of a managed services contract. In addition to detailing the terms and a termination clause, the agreement should also explain the supplier`s limitations of liability under certain conditions. Customers should be aware of the associated fees and payment schedule for the duration of the contract. Finally, the agreement should reflect labour prices or PSM fees for requested services that are not lump sum support.
In addition to the duration of your contract, you should also pay attention to what your MSP requires of you to terminate your contract. In most cases, it will be a matter of completing the term of your contract or paying the rest. The above are just some of the general key clauses that should be included in an MSA. It is important that, when drafting such an agreement, care is taken not only to cover the services provided, but also to take due account of the risks posed to the MSP. This section explains how the MSP charges for service calls when no problems are detected at the customer`s place of business. Many MSPs start as Value-Added Resellers (VARs) and do not require a managed services contract under this agreement. When a product or service requires an SLA or other type of contract, this is often done between the customer and the supplier, with the VAR acting as an intermediary between them. However, with the managed services model, the channel assumes more direct responsibility for the customer`s systems, as MSPs are hired to proactively monitor and repair the network itself.
Some MSPs use the term Service Level Agreement instead of Managed Services Agreement when naming or referring to their contract with their customers for services. The agreement must include the MSP`s Service Level Agreement (SLA), prioritization process, response times, a definition of support levels, and the service desk escalation process. When drafting the limitation of liability clause in the MSA, particular attention should be paid so that the risk of liability in the event of a breach does not outweigh the economic benefit of the MSA. In the case of multi-year contracts, it is important to limit liability each year for all claims in total to the amount paid by the customer for the services in each year, without applying an unused cap to subsequent years. Another nuance is to limit the liability for each service, as for a silo, to the amount paid by the customer for the service that gives rise to the liability. Non-payment: If payment is not received no later than the first of the month for that month of service, MSP reserves the right to cease providing on-site and remote services until payment of the monthly fee, provided that MSP is informed of the late payment five (5) business days in advance. A Managed Services Agreement (MSA) is a written agreement between a provider and its customer that specifies the provider`s service level. Essentially, the agreement outlines the responsibilities of the supplier and the customer with respect to the services provided, the minimum response time and the protection of liability for the supplier. In addition, the agreement establishes a payment structure agreed between the two parties. What should be included in a managed services contract? Exclusions should be inserted for loss of profits, revenue, revenue, transactions, reputational and data customers, whether direct or indirect, and a general exclusion of indirect and consequential losses should be introduced. .