Everything You (Didn’t) Want to Know About Expired Maintenance Contracts

Posted by Billie Mohrbach, Director of Enterprise Contracts
May 31, 2017

You already know that missing a critical maintenance renewal could potentially leave your business and critical equipment unprotected. But you may not be aware that there are other consequences as well, which include an added administrative burden and financial hit.

Here’s everything you may not know about lapsed maintenance contracts and what you can do about them.

Why You Might Miss a Renewal

Original Equipment Manufacturers (OEMs) use automated processes for sending renewals notifications to their customers, typically sent 90/60/30 days before the contract expiration date. However, vendors communicate these renewal notifications differently.

That means maintenance renewals sometimes fall through the cracks. For example, sometimes people miss or misinterpret the emails. Other times, people simply ignore them. (It happens more often than you’d think.) Vendors might also be sending these auto-generated emails to an individual who’s left the company.

What Happens When You Miss a Renewal

When you miss a maintenance renewal, your vendors will charge you a reinstatement fee, which ranges anywhere between 20-50% the cost of the contract. So, if you have a $500,000 maintenance contract that lapses, you might have to pay $750,000 to reinstate it. Each vendor has a different name for these fees, and each charges a different rate—which could be calculated differently.

If you experience an unsupported hardware failure before you get your contract reinstated, your vendors will still insist on having a paid order in hand before they’ll supply any maintenance coverage.

For software, it can take up to 48 hours to get a new key, which can expose you to significant risks if that software provides your firewall, for example.

Reinstated support contracts keep their original expiration dates. If your original contract expired in May and you didn’t reinstate it until July, that contract will still expire the following May.

What You Can Do About It

Managing your contracts proactively is the best way to avoid this problem. To make tracking expiration dates easier, consider consolidating your support contracts with each vendor—you’ll only have one date to remember. Also, try to schedule your expiration dates strategically. Choose a date that will give you plenty of time to review all your options before you make your renewal decisions.

If you get hit with a reinstatement fee, you can try to get it waived—but it’s going to be difficult. You need to find the right person, ask the right questions, and make the right business case. Some vendors are more flexible than others.

Alternatively, you can consider engaging a provider like ASG. We can leverage our vendor relationships to negotiate on your behalf and get the fees waived or reduced. We can also help you prioritize your expired contracts to target the vendors that are most likely to offer some leeway.

If you’d like to talk to a maintenance expert who can help you choose the right options, consider signing up for a free assessment.

Everything You (Didn’t ) Want to Know About Expired Maintenance Contracts

About Billie Mohrbach As the Director of Enterprise Contracts at ASG, Billie regularly works with companies to simplify their support contract management processes. Throughout her 15-year career as an IT professional, Billie has raised the bar in preserving IT budgets, sorting out critical support and maintenance contract issues, and delivering unsurpassed client satisfaction.

Filed Under: Data Center

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