AT&T feels it should be granted a one-year renewal for VMware support services, which it claimed would be the second of three one-year renewals to which its contract entitles it.
The software licenses are perpetual, the support services require ongoing contracts. I don’t think I’ve ever heard of having a contract to a contract. Maybe if you’re as big as AT&T they let you do this, but having a contract that says “we have the option to renew our support contract three times” seems silly. Usually either both parties agree to renew it at expiration, or not.
At enterprise scale I can see a contract for being able to renew your support contract. Aka for us to implement this, we expect you to support it but we aren’t going to pay you up front in case it doesn’t pan out or we drop the project.
contract “options” are indeed normal. You could also lump in government contracts into the category your thinking about. I’ve never heard of a scenario where the vendor broke contract by not honoring the options. I also have never dealt with a vendor getting bought out and then not honoring existing contracts. Super fun to watch the corporate drama. I personally don’t care for the private equity style business that seems to be an even bigger problem than the investor first/profit centric model that I thought was the worst thing.
The software licenses are perpetual, the support services require ongoing contracts. I don’t think I’ve ever heard of having a contract to a contract. Maybe if you’re as big as AT&T they let you do this, but having a contract that says “we have the option to renew our support contract three times” seems silly. Usually either both parties agree to renew it at expiration, or not.
At enterprise scale I can see a contract for being able to renew your support contract. Aka for us to implement this, we expect you to support it but we aren’t going to pay you up front in case it doesn’t pan out or we drop the project.
contract “options” are indeed normal. You could also lump in government contracts into the category your thinking about. I’ve never heard of a scenario where the vendor broke contract by not honoring the options. I also have never dealt with a vendor getting bought out and then not honoring existing contracts. Super fun to watch the corporate drama. I personally don’t care for the private equity style business that seems to be an even bigger problem than the investor first/profit centric model that I thought was the worst thing.
I don’t think it’s unusual.
Big companies need a promise of some length of support in order to commit to a product.
The set number of renewals locks in the price and generally also allows the customer to not renew if that is their desire.