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No Contract No Commitment

No commitment graphicNo contract, no commitment is a business reality that means if there is no agreement then you should expect nothing. You read that right and let it sink in. We often forget this important adage and clever marketing sometimes nabs the unsuspecting, who quickly learn no obligation literally implies that you can’t really complain about lousy or no service.

A character from some obscure nonprofit approached me be about a year ago to partner in technology. The nonprofit had no technology expertise or emphasis, but was going to offer technology services at nominal cost to other nonprofits. He had a hardware vendor and was looking for services vendors. We came highly recommended for our managed services and cloud computing expertise, but this was nonprofit and of course pricing must be low to give back. I really didn’t think much would happen, but soon we did a significant deal that I’m sure he thought was high risk, but we do one hundred of annually and went very well. Then we did several more deals all flawless, even teaching our partner with low-level understanding some of the basics.

A couple of times, we even offered to do small projects for free in exchange for Partner of Record (Microsoft pays a 2% fee of the monthly subscription). Suddenly, we should do all projects for free as our expertise and effort was now deemed not worthy of charging. Our partner now had an employee he wrenched from a customer and 5 high school students all sitting in one small office, that purportedly did managed services without any systems, processes, or leadership.

Not long after that the flame came. We were told we violated our “agreement” by doing managed services with a mutual customer we signed 6 months before the partner’s organization was even viable and that we had sold hardware that should have gone through the partner’s hardware vendor. Further, since we would not do free projects and as retribution, Partner of Record was changed to a third-party unknown to the customers. It didn’t appear to matter, that we pointed out the hardware vendor was fraudulently not selling product at advertised nonprofit pricing. Why couldn’t we couldn’t we refuse to sell the server and tell the customer they had to buy from the other vendor at the higher price?

In a rare occurrence, I lost discipline and not so politely told our partner to “stick it”. I also visited with several mutual customers in person, but they had no understanding that they were captured and simply wanted to stay out of the fray. It was then that I realized we had no written contract and while we had been wronged ethically, there was nothing a judge or anyone could look at to determine right and wrong.

Karma often repays bad deeds. Microsoft changed the cloud nonprofit program and offered a no cost subscription to most nonprofits, which of course had no Partner of Record fees. The feedback from the channel is our former partner’s expertise is lacking for all but the most basic desktop support. In fact, several nonprofits feel they can offer a similar service with better expertise and actual nonprofit pricing for products. Further, since no written agreement or contract is used with customers for their managed services, response is slow and problem resolution lacking. The service is cheap, but customers polled aren’t happy and looking for alternatives. Whether for disputes or performance, these customers are also being reminded of the business lesson – no contract, no commitment.

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