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Negotiate a Better Cloud Contract to Avoid Traps

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Image: Maksym Dykha -
Enterprise Connect is right around the corner. It’s where I’ll be teaching attendees how best to negotiate cloud contracts, spot “gotchas,” and prevent them from happening in the future. Some of these “gotchas” include whether or not your service level agreement is providing protection and ensuring that your contract allows you to change providers when necessary. Here I’m going to highlight billing and give tips on how to avoid pitfalls.
But first. When should billing begin for your UCaaS or CCaaS services?
It seems like a simple question to answer. Most people would respond, “When I start using the services.” Sounds logical, right?
As a veteran technology consultant, I have reviewed many contracts. Billing start dates for new services can be quite arbitrary. For example, I’ve seen agreements that say billing will begin:
  • 60 or 90 days after contract signature
  • When the solution is ready for acceptance testing by the customer
  • When the solution is substantially ready for activation
Only when your numbers are actually ported to the new solution can you really begin using the services. So, logically, your contract should state that billing commences when your numbers port.
When you transition to new services all at once, your billing start date is easy to manage, and it’s easy to check your bill for accuracy. But many transitions occur in phases, and this adds complexity. In this situation, there are two things you need to negotiate:
  1. The beginning date for billing services—In each phase, the billing date should begin when numbers port for that phase.
  2. The end date for the contract—For all phases, regardless of the start date for services, the end date for the contract should be the same (or “coterminous”), as depicted below:

If you plan on a phased transition, you must track the date and quantity (by license or service type) of users that move during each phase. You will need this information to verify the accuracy of the billing. It’s much easier to collect this information when you’re already working with it as you prepare to port your numbers. It’s more difficult to go back and recreate the information later.

To recap:
  • Billing should begin when numbers are ported.
  • End dates should be coterminous.
  • Maintain a record of port dates and quantities (by license or service type) so you can reconcile your bill later.
Will you be signing contracts for any cloud services soon? Would you like to know about potential pitfalls that could be lurking in those agreements?
If so, join me for my session at Enterprise Connect Virtual, “Don’t Get Caught by These Cloud Contract Gotchas.” I’ll share what you should look for to control your ongoing costs and ensure that service level agreements provide real protection. I’ll also address tactics vendors may use to make it difficult for you to change providers in the future. Get your free virtual pass today!

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Melissa is writing on behalf of the SCTC, a premier professional organization for independent consultants. Our consultant members are leaders in the industry, able to provide best of breed professional services in a wide array of technologies. Every consultant member commits annually to a strict Code of Ethics, ensuring they work for the client benefit only and do not receive financial compensation from vendors and service providers.