What to Expect When You Sign a Managed Services Contract

The last thing between you and having your IT needs handled by a managed service provider (MSP) is the contract.

managed services contract

This document clearly lays out expectations between you and your MSP, so you can focus on having your IT problems resolved.

Misunderstood expectations can cause confusion on both sides of the contract, so it’s important you and your provider are on the same page about what managed services will look like for your company. 

Additionally, the contract answers many questions customers have about managed IT services.

At the KR Group, we’ll go over the contract with you before you sign on for our services, and we recommend you read through it in its entirety as well.

While your contract is a wealth of information about your agreement, there are six components we want to highlight:

  1. Hardware and software requirements 
  2. Hours of service
  3. Cost of managed IT services
  4. Length of contract
  5. Exit clause
  6. Changes to the original agreement

If you want a more in depth analysis of our managed IT services contracts, read our complete guide on signing up for this IT solution.

Hardware and software requirements

Contracting with an MSP means agreeing to use their standardized hardware and software suite.

This allows the engineers to efficiently monitor and serve customers since they are using the same user interfaces and procedures for all of their customers.

Some MSPs, including us at The KR Group, have some leniency with hardware requirements and removing end-of-life devices from your environment.

We know IT is an investment, but we also want to do everything we can to keep you secure and running. End-of-life equipment can impair that goal.

So, if outdated hardware is currently part of your environment, we (and other MSPs) will work with you to implement a plan to replace it.

Hours of service

When you need to call on your MSP to help you with an IT issue, most operate between 8 a.m. and 5 p.m., Monday through Friday.

Not all MSP customers keep traditional 8 a.m. to 5 p.m. business hours, though, and IT malfunctions can happen at any time of the day.

The best MSPs staff on-call engineers to handle these requests 24 hours a day, 7 days a week, and 365 days a year, so you can count on service whenever you need it. However, with most managed IT services contracts, the after-hours support comes at an additional charge.

However, reputable MSPs are transparent about this in the contract and whenever you make an after-hours request. While they know some issues can’t wait until the next business day, they’ll remind you of the additional charge and double-check if you want to proceed.

Cost of managed IT services

When it comes to the contract, almost all of our customers want to know how much it’s going to cost.

Since each business has different needs, cost varies from customer to customer.

In general, all customers can expect to pay the following:

  • $500 per site for an audit
  • $750 to $2,000 per site for a firewall
  • $85 to $100 per user per month for software and wholistic IT support

The more users you have, the larger capacity firewall (and thus more expensive) you’ll need. On the flip-side, as user count increases, the price of IT support per user decreases.

Other factors, such as owning compatible hardware instead of leasing, agreeing to a multi-year contract (which we’ll discuss next), or agreeing to remote-only IT support can decrease the overall cost.

Length of a managed services contract

Another important component of an MSP contract is how long it lasts.

managed services contract

The standard minimum managed IT services contract is for 1 year. Any less time than this doesn’t allow an MSP a chance to get to know you and your needs.

You can opt for longer contract terms, though, such as 3 years or 5 years.

On the managed services side, these longer terms give you a chance to get to know your MSP without the pressure of renewing.

They also come with an approximately 10% discount for a 3-year contract and 15% for a 5-year contract.

Exit clause

Along with the length of your contract, you should also look for what your MSP requires from you to end your contract. In most cases, it’ll be to complete your contract term or pay out the remainder of it. 

At The KR Group, our managed IT services clients are entitled to a 90-day trial period. During this time, if they are unsatisfied with the service, they’re able to leave without any penalties. After those three months, though, customers have to wait until the end of their contract or pay out the remainder of it before leaving.

Changes to the original agreement

Whether you’re in a 1-year, 2-year, or 3-year agreement, you’re likely to have some changes to your company during your contract.

MSPs know you can’t predict the future, so they encompass possible changes in their contract.

The most common change to contracts is user (or device) count as your company grows. MSPs account for this and include provisions to growing companies.

When you need to add a user, you’ll need to inform your MSP in advance. Your engineer will work with human resources to learn what devices and software the new user will need and prepare them.

Setting up new devices for the new user is billed outside of your contract, but eventually, the new user is brought into your recurring charges. How soon this happens depends on your MSP’s policies, and should be outlined in your contract.

Learning more

All in all, your contract is a roadmap to your managed IT services and the best way to know what you can expect from your MSP.

It’s the best go-to for information regarding hardware and software requirements, hours, cost, contract length, exit clause, and making changes, as well as other information.

If you’re still nervous about signing up for a managed IT services contract, you can find the answers to all of your questions in our complete guide to signing up for managed services.

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