Longer Contract terms - Do you want them?

[EXA_Mark]

Firstly, everyone please don't see this as a concealed sales pitch, it isn't. I really would like some genuine feedback from the Edugeek user base.

 

We are finding a significant number of our competitors are moving back to tie schools into three and even five year contracts, and obviously there are some cost reductions to be had (especially on leased lines/private circuits); BUT do you really want to be in a five year contract, even if it did work out about a £500-£1000 a year cheaper than today's cost?

 

Looking back at the past twelve years we have been providing connectivity to schools, the price of leased lines in particular has dropped significantly, in fact forget the past twelve years, the past three years have seen massive changes and we would expect that to continue to do so in the future, especially on the Gbps circuits. I know a lot of finance managers/bursars/offices managers like the security of knowing budgets, as do I, but from our own personal perspective our connectivity charges have never increased (not even by inflation) in 12 years, so that really isn't a reason from our side to do it.

 

We've always been a little bit unique in that our default contracts are one year, and I have always believed that schools preferred that level of flexibility, and if you deliver a great service schools will want to stay and do not need to be forced to stay. However this morning alone I have had six schools get in touch (and it's only 09:47 as I type) that have been offered five year contracts and would like us to offer the same.

 

I have always thought that you should give the customer what they want (if of course you can), but how many of you really want to go back to the bad old days of long term contracts? Of course we can offer longer term, as well as our default, and I guess most likely will, I am just curious as to your opinions. Thanks.

[Edu-IT]

Personally if I was moving to a company I hadn't used before, I wouldn't want to commit to a 5 year agreement, in case things didn't go as expected. 1 year isn't so bad to muddle on through if things aren't as you expect. I know in some cases you could pay to end a contract but that isn't good use of money.

 

Plus with budgets as they are 5 years is a long time to commit to an agreement.

 

I think it depends on the school, their long term plan, and the price. Oh and the company and their reputation.

[FN-GM]

If I don't know the company I will start a contract. If I am comfortable I get 5 year deals with loads of stuff. An example is warranty on servers and PC's, internet connection, WAN links etc

[hardtailstar]

In my old school, we refused 5 year contracts. We either asked for a year or three.

[TronXP]

We sign 5 year contracts, yet usually after 2 years they come back to us with a new deal, the last as such gave us more bandwidth and a cheaper price........

[mikkydoos]

As you know, I'm in discussions with Virgin atm who want us to sign a new 3 year contract to increase our bandwidth. We're only one year in on our current contract. I feel we should be able to upgrade the terms of our current contract without penalty.

 

I'm not going to do this because I don't want to be tied down for 3 years just to up bandwidth. What if I want to reduce it? I personally don't think they deserve our business.

 

As far as an ISP goes, I think if you are prepared to be reliable, flexible and fair then the contract length doesn't matter. Most ISP's are very similarly priced anyway

Edited May 8, 2015 by mikkydoos

[dhicks]

We are finding a significant number of our competitors are moving back to tie schools into three and even five year contracts

 

Looking at Internet connectivity in particular, we're currently considering which providor to go for. One providor gives a good price, but the length of the 5-year contract is putting us off - we'd much prefer a 3-year contract. I don't know if I would want yearly contracts, just from the point of view that you'd have to spend time every year re-negotiating a new contract.

[mikkydoos]

Looking at Internet connectivity in particular, we're currently considering which providor to go for. One providor gives a good price, but the length of the 5-year contract is putting us off - we'd much prefer a 3-year contract. I don't know if I would want yearly contracts, just from the point of view that you'd have to spend time every year re-negotiating a new contract.

 

Just ask them if you have the option to change your bandwidth freely

[EXA_Mark]

I don't know if I would want yearly contracts, just from the point of view that you'd have to spend time every year re-negotiating a new contract.

That's a fair point that I didn't really consider the amount of time you spent re-negotiating. From our perspective because we have never had connectivity or filtering price rises, and customers generally want more bandwidth year on year. Customers just upgrade as and when they need to, rather than waiting to end of contract, or tying themselves into three year extensions; and the re-negotiating really wasn't something I had thought about. Thanks for pointing that out.

[mdench]

That's a fair point that I didn't really consider the amount of time you spent re-negotiating. From our perspective because we have never had connectivity or filtering price rises, and customers generally want more bandwidth year on year. Customers just upgrade as and when they need to, rather than waiting to end of contract, or tying themselves into three year extensions; and the re-negotiating really wasn't something I had thought about. Thanks for pointing that out.

 

If your sticking with the same supplier I don't think its too bad but if your looking to change supplier then yeah negotiating time can be massive. We wanted to shift from 100mbps to 1Gbps circuit and because of the price jump we had to go out to multiple providers. From initial email to the providers and final choice of a provider took nearly 7 months of back and forth with pricing and various add on solutions, SLAs etc.