Contract Games: How Verizon Rapid Delivery Turns Contracting on its Head
Large business customers need to be well prepared lest they be sucked into the trap Verizon is setting with its "optimized" service-delivery platform.
Verizon wants enterprise customers to move to its "optimized" Verizon Rapid Delivery (VRD) platform. In fact, it is openly enticing customers to do so by offering (slightly) lower pricing and promotions to get them to move. Verizon suggests that VRD will streamline processes and make ordering and installation quicker. Sounds good -- everyone wants lower prices and quicker delivery.
So should you jump on the VRD bus? No. As your mother always told you, if it sounds too good to be true, then it probably is.
The key is that when you sign up for VRD, you allow Verizon's online VRD terms to trump your negotiated contract. If you negotiated two years to contest an improper invoice, you have now agreed that you only have six months to dispute an invoice. If you negotiated service-level agreements (SLAs) and remedies for Verizon's failure to meet them, you have just agreed to allow Verizon to determine whether it has met the SLAs (based solely on its own records) and that your only remedy for any claim relating to poor service is the standard credits. Even the lower rates may be illusory; for voice services, Verizon may change its rates and charges at any time upon seven days' notice. So, if you rely on the VRD rates posted online without adding them to your contract, you are at risk of those changing as well. And our favorite -- under VRD, if you dispute a bill Verizon serves as the judge and jury and decides the dispute.
VRD is not new -- Verizon introduced it a couple of years ago, and we warned business customers about it then (read "Verizon Rapid Delivery – Not So Fast"). As noted above, Verizon claimed the VRD structure would speed the ordering process by relying on "standardized contracts and SLAs" where "customers can order for themselves." Today, Verizon increasingly is using this approach to gut account teams, negotiated terms, and the pricing and ordering structure relied upon by many businesses.
To avoid Verizon's effort to undermine negotiated terms, business customers need to understand the risks presented by VRD, Verizon's strategy, and how to address them. Verizon's "Rapid Delivery PIP & IP Business Bundle Upsell Promotion v2.0") and "Rapid Delivery VSA AVC Promotion v2.0" ) show Verizon's tactics. The "promotions" entice businesses by promising to waive otherwise applicable underutilization and early termination charges if the customer moves to a non-TDM service, such as Verizon MPLS/VoIP. If the term "upsell" doesn't raise red flags, the requirements should give you pause. You must sign "Verizon's form of Replacement Agreement used for Optimized Services" and commit to buy the services for the agreement term at average monthly charges that are equal to or greater than those committed for the legacy services under the customer's existing agreement. We don't see the savings (or logic) to this promotion, although naïve (or desperate) customers may.
What does this mean and how did we get here? In the remainder of this article we look at Verizon's strategy, how VRD has grown into the threat to negotiated deals it is today, and how you can level the field when playing the VRD game.
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Page 2 - The Trajectory of VRD Contracts for Business Customers
Page 3 - Three Steps for Resisting -- and Surviving -- VRD
Page 4 - Chart: Verizon's Services Platform