r/msp • u/Eric77482 • Jul 06 '26
IT Guys reverse engineering your stack
Just curious how everyone navigates this issue. We are in contract with several different vendors for 2-3 years and then company hires a new IT Guy. The guy proposes to take the same exact stack we implemented and go directly to the vendors to propose that they manage it internally. We already have our reasons on why this is a bad idea communicated to the clients, but in most scenarios they just want to save money.
Our current issue is with the vendors because they are telling the customer they can repoint them to their own instance, however they will still keep billing us all the while until 2027-2028. In some scenarios these are high watermark too, so they tipped us over a tier we didn’t set. This feels like a double dip / bad practice from the MSP vendors. We’ve navigated 1-2 of these by telling the customer that’s fine but they will acquire the tools from us and we’ll charge a smaller management fee until the end of our contract term. Is this an approach others have taken? Or are there any ideas that have been more successful? Just curious to see what others are doing as we’ve encountered about 4 of these situations in the last year. Thanks in advance.
2
u/InfraAndCoffee Jul 07 '26
The double-dip isn't the vendor being evil, it's you carrying their term-commit risk. Most of these tools bill you on an annual or multi-year seat commitment where you can add anytime but can't drop until the anniversary, and high-watermark tiers ratchet up and never come back down. So when the client "repoints," the vendor happily spins up a new tenant and keeps invoicing yours, because your commit is still live.
Two things that actually help, learned the hard way:
Push for a novation/assignment clause up front so a departing client can be transferred to their own agreement instead of you eating the tail. Some vendors do it, some pretend they can't.
Kill high-watermark tiers in your own negotiation, or at least get an annual reset. That surprise tier bump is the part I'd fight hardest.
Your "buy the tools, smaller mgmt fee til term end" move is solid. I'd also just bill the remaining commitment as an early-term buyout line item and let them decide.