You're about to sign a managed network service agreement with an MSP (Managed Service Provider). Before you sign, you should understand what you're actually agreeing to.

Too many businesses sign MSAs without reading them, then six months later they're frustrated because:

  • The SLA (Service Level Agreement) doesn't cover what they thought it did
  • Support response times are slower than promised
  • The MSP charges extra for things the business owner thought were included
  • There's no clear exit plan if you want to switch providers

In this guide, I'm breaking down what a managed network service agreement should include, what to watch for, and what to negotiate.

The Three Core Parts of an MSA

Every managed services SLA has three main components:

1. The Services (What They Actually Do)

This section lists exactly what the MSP is responsible for. It should be specific, not vague.

Vague language (bad):

  • "Monitor and maintain your network"
  • "Provide IT support"
  • "Ensure network performance"

Specific language (good):

  • "Monitor network uptime, bandwidth usage, and device health 24/7"
  • "Provide phone/email support during business hours; emergency support 24/7"
  • "Maintain availability of core systems at 99.5% uptime"

Key services to specify:

  • Monitoring scope: What devices are monitored? (Switches? Firewalls? Servers? WiFi?)
  • Support hours: Business hours only? 24/7? Who staffs evenings/weekends?
  • Response time: How fast do they respond to alerts? 15 minutes? 1 hour?
  • Resolution time: How fast do they fix issues? (Different for critical vs. non-critical)
  • Updates and patches: Who installs them? When? Do they require downtime?
  • Backups: Are they included? How often? Where are backups stored?
  • Capacity planning: Do they help you plan for growth?
  • Vendor management: Do they oversee your ISP, phone provider, etc.?

Red flag: If the agreement doesn't specify hours of support or what's monitored, don't sign it yet. Push for specifics.

2. The SLA (Service Level Agreement)

The SLA describes what happens when the MSP fails to meet their obligations.

Key SLA terms:

Uptime guarantee:

  • 99.5% uptime = 3.6 hours of downtime/month
  • 99.9% uptime = 43 minutes of downtime/month
  • 99.99% uptime = 4.3 minutes of downtime/month

Higher percentages require redundancy and cost more.

Response time:

  • Critical issue: 1 hour or better
  • Important issue: 4 hours
  • Non-critical: 8-24 hours

Credits if SLA is missed:

  • Should be in writing: "If uptime drops below 99.5%, customer receives 10% credit toward next month's fee"
  • Without credits, the SLA is meaningless

Exclusions:

  • What's NOT covered by the SLA? (Customer negligence? Third-party failures?)
  • Are scheduled maintenance windows excluded? (Should be)
  • Are upstream failures (ISP down) excluded? (Usually are)

Red flag: If the SLA has no credits for missing targets, the SLA is just a suggestion, not an obligation.

3. The Costs and Terms

This is where surprises often hide.

Key terms:

Base monthly fee:

  • Flat fee for core services
  • Should be all-inclusive (no surprise charges)

Out-of-scope work:

  • What costs extra? Network redesigns? Server upgrades? Hardware replacement?
  • Get a list of what's included vs. extra charges

Hardware and software:

  • Does the MSP include hardware (switches, access points)? Or do you buy it?
  • Do you own the hardware, or is it leased?
  • Who replaces failed equipment?

Setup/onboarding fees:

  • One-time cost to migrate to their platform
  • Usually $500-$2,000 depending on complexity

Cancellation terms:

  • How long is the contract? (1 year? 3 years?)
  • Can you cancel early? What's the penalty?
  • Do they help transition your network when you leave?

Price increases:

  • Can they raise rates annually? By how much? (Should have a cap)
  • Does the contract lock in rates for the full term?

Red flag: If there's no limit on what costs extra, you could face surprise $2,000+ charges for simple requests.

Critical Terms to Negotiate

Term Length

What most MSPs want: 3-year contract (predictable, locked revenue)

What you should push for: 1-year contract with renewal option

Why: You need flexibility to switch if the MSP isn't delivering. A 1-year term lets you escape at reasonable cost if things aren't working.

Compromise: 2-year term with option to cancel after 12 months with 60-90 day notice.

Exit Clause and Transition Support

Critical clause: When you leave, the MSP should:

  • Provide 30-60 days notice to transition
  • Document all configurations and passwords
  • Cooperate with your new provider
  • Not hold your data hostage

Red flag: If the MSP won't commit to transition support, be very careful. They could hold your network hostage when you try to leave.

Hardware Ownership

Ask: Who owns the switches, firewalls, and access points they install?

Scenario A (Bad):

  • MSP owns all hardware
  • You pay monthly equipment fee
  • If you leave, you start over (huge switching cost)

Scenario B (Good):

  • You own the hardware
  • MSP maintains it under warranty
  • If you leave, you keep your equipment and just find a new provider

Push for: Scenario B. You own what you pay for.

Escalation Process

Include: Clear process for escalating issues.

Example:

  1. Primary support person
  2. If unresolved after 4 hours, escalate to senior technician
  3. If still unresolved after 8 hours, escalate to management
  4. If still unresolved, customer can escalate to MSP leadership

Without this, you can get stuck with a junior tech who can't solve your problem.

Rate Increase Cap

Ask: "By how much can you increase rates annually?"

Standard answer: 3-5% per year (tied to CPI)

Red flag: No cap, or vague language like "at market rates"

Push for: "Rates will increase by no more than 3% annually"

What's Typically NOT Included (Watch for Extra Charges)

When you see "Managed Network Services," understand what you're NOT getting:

Usually NOT included:

  • Major network redesigns or reconfiguration
  • Hardware replacement (may be charged hourly)
  • Vendor management/contract negotiation
  • Specialized consulting (security audit, compliance review)
  • Training and documentation
  • Custom development or scripting

Why it matters: If the MSP wants to redesign your network, they might charge $3,000-$5,000 extra. Make sure you understand this upfront.

How to protect yourself: Clarify what IS included in the monthly fee:

  • "Does the monthly fee include up to 10 hours per month of consulting/design work?"
  • "Are hardware replacements included, or charged separately?"
  • "Is security hardening included, or is that extra?"

Get specific numbers in writing.

The Service Level Agreement Deep Dive

Let's look at a real example MSP contract clause:

Bad example: "Provider will use commercially reasonable efforts to maintain system availability."

(Too vague. "Reasonable efforts" could mean anything.)

Good example: "Provider guarantees 99.5% uptime for core systems (firewall, primary switch, internet connectivity). Uptime is measured monthly. If measured uptime falls below 99.5%, customer receives a credit equal to 10% of that month's service fee. Scheduled maintenance windows (max 4 hours/month, scheduled in advance) are excluded. Failure due to customer equipment, third-party services (ISP), or customer negligence is excluded."

(Specific, measurable, with defined exclusions and remedies.)

Red Flags in MSA Contracts

Flag 1: "As needed" or vague service descriptions

  • If the MSA doesn't specifically describe what's monitored and supported, you don't know what you're paying for.

Flag 2: No SLA or unbacked SLA

  • If there's an uptime target but no credits when they miss it, ignore it.

Flag 3: Automatic price increases with no cap

  • "Provider may increase rates annually at its discretion" = price hike coming.

Flag 4: Long contract with expensive early exit

  • 3-year contract with 6-month cancellation penalty means you're locked in.

Flag 5: MSP owns all hardware

  • You're leasing everything, paying monthly, and can't leave without losing equipment.

Flag 6: No transition support clause

  • When you leave (and you might), the MSP should help. If they won't, they have incentive to make leaving painful.

Flag 7: Unlimited out-of-scope charges

  • "Any work outside the monitoring scope billed at $150/hour" = surprise bills.

Flag 8: No escalation process

  • If the support person can't solve your problem, how do you escalate?

If you see these, negotiate or find a different MSP.

What a Good Managed Network Service Agreement Includes

A well-written MSA should have:

  • ✓ Specific services list (what's monitored, what's supported)
  • ✓ Clear SLA targets (99.5%+ uptime) with credits for missing targets
  • ✓ Response and resolution timeframes (1 hour critical, 4 hour important, etc.)
  • ✓ Business hours and after-hours support defined
  • ✓ Hardware ownership (you own it) or clear leasing terms
  • ✓ Annual price cap (3-5% maximum)
  • ✓ 1-2 year term with exit clause and transition support
  • ✓ Escalation process for unresolved issues
  • ✓ Backup and disaster recovery procedures documented
  • ✓ Clear list of what costs extra
  • ✓ Limitation of liability (reasonable caps on damages both ways)
  • ✓ Confidentiality and security requirements

Negotiation Tips

1. Don't accept the first draft. MSP contracts are drafted to favor the MSP. Every major term is negotiable.

2. Focus on the big three:

  • Contract length and exit clause
  • SLA terms and credits
  • Price caps

3. Ask for references. Talk to 2-3 customers about their actual experience with the MSA. Does support really respond in 1 hour? Are there surprise charges?

4. Get it in writing. Don't accept verbal promises. Everything goes in the contract or it doesn't exist.

5. Have a lawyer review it. For a major services contract ($1,000+/month), having a lawyer review takes 1-2 hours at $200-$300/hour. It's cheap insurance on a $10,000-$20,000/year commitment.

The Bottom Line

A managed network service agreement is a commitment you'll live with for 1-3 years. Don't sign without understanding:

  • What you're getting (services list)
  • What reliability you're guaranteed (SLA)
  • What it costs (and what costs extra)
  • How to get out if it's not working (exit clause)

MSPs are essential for managing modern networks. But a bad contract makes the relationship painful. A good contract protects both sides and sets expectations clearly.

Ready to Review Your MSA?

Sandbar Systems provides managed network services with transparent, fair contracts. We believe in clear SLAs, responsive support, and no surprise charges.

If you're signing your first managed services agreement or renegotiating with a current provider, we can help you understand what's fair and what to watch out for.

Schedule Your Free Consultation

Call us: (804) 510-9224 Email: info@sandbarsys.com

We'll review your current MSA, explain the terms in plain language, and help you get the best deal.