Jun, 2003 : Gartner: Contracts Must Consider Acquistion

📅 June 27, 2003 - With increased merger and acquisition activity in the IT services industry, it is crucial that enterprises have terms worked into their outsourcing contracts that clearly address the consolidation issue, says research firm Gartner (gartner.com).

"Enterprises should consider including a 25 percent acquisition clause into their contract, which allows the enterprise to get out of the contract if the service provider is more than 25 percent acquired by another company," said Ted Chamberlin, an industry analyst at Gartner.
Gartner also recommends including other clauses into outsourcing contracts.
This could include a refresh clause that would enable enterprises to upgrade contracts ? for example, when incorporating new applications; a preset pricing clause that would prevent price changes when new applications or hardware is added; or a competitive pricing clause that would force the application service provider to match deals offered to other enterprises.
Gartner analysts are providing their outlook for the outsourcing industry this week during the Gartner Outsourcing Summit, which is being held June 23-25 in Los Angeles.
Gartner is a research and analysis firm headquartered in Stamford, Connecticut.