Crafting a Win-Win IT Managed Services Agreement

In all types of long-term commercial relationships a well-crafted agreement which safeguards the interests of both the providers and customers is of utmost importance. It couldn’t be truer for IT managed services. Such agreements protect both parties from lawsuits and lay out their responsibilities clearly. 

Let us tell you how you can do that. But first, why don’t you go through these two short but attention grabbing articles about metrics in software development and best practices for quality software.

Components of the Agreement

The author of the famous best seller on successful managed services practice gave the following structure of the agreement of this kind. 

  • Services Definition: In here detailed definition of the services that are requested by the customer are given here.
  • Terms of agreement: In here the time period until which the agreement will be in effect is stated, as well as the time when it will terminate.
  • Taxes: In this section the service provider states their policy on taxes for the services which will be delivered. 
  • Fees and schedule of payment: This part contains details of how the payment will be made and the methods which will be used. 
  • Exclusions: This section lists out the services which will not be requested.
  • Minimum standards: This part sets out the standards which must be met in order to request the services.
  • Equipment and covered users: This part lists out all the equipment, current users and services which come under the agreement and also specifies provisions for the time when more users, equipment or services will be required.
  • Response and resolution: In this section the ability of the MSP is reflected upon whether it can prioritize the problems and the solutions for the requested services. 
  • Confidentiality: In here the responsibility of the service provider to not disclose any confidential information is recorded. 
  • Limitations of liability: In this part the conditions under which the service provider may be held liable for damages are limited. 
  • Updates: This part specifies how often the software will be updated for equipment.
  • Service level agreement: This part covers all the points that are necessary for ensuring a service availability. 
  • Problem and incident management process: This part records MSP’s approach on how it will proactively address the technical issues which will arise in the customer’s IT infrastructure. 

Areas of Problem

Only having the agreement for IT managed services won’t take care of all the misunderstandings which may arise between the provider and customers. However, if the legal issues are well contemplated on in the contract then it might make things easy. The following are a few problem areas which require extra attention to be paid to. 

  • Mitigation of security risk
  • Termination of agreement
  • Poaching of talent
  • Scope of agreement
  • Confidentiality and privacy


An effective IT managed service agreement always keeps its relevancy without being rigid. The contracts and businesses strategies often require change so the contracts should conform as well. That’s why both parties of contract should at least meet once a year to discuss the contract and its terms of service. An MSP who knows how to do their work will always point out the changes required in the IT infrastructure. 


The IT managed service agreement which serves both parties should always be crafted based on the business goals of the customer. But before you start with the contract, you should first understand all the ins and outs of the IT infrastructure of your customer. 

In this case your customer gets an IT system which runs smoothly and an MSP who is all too happy to handle a system which doesn’t run into complex problems.

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