Avoiding a Hostage Situation: Why a Prenup with Your Managed Services Provider is a Must!

When relationships with a Managed Services Provider (MSP) or Cloud Service Provider (CSP) begin, everything seems perfect. That "honeymoon phase" - your systems run smoothly, issues are resolved quickly, and communication is seamless. Over time, however, things can change. Strategic misalignment, cost-cutting measures, or leadership shifts can cause service levels to decline. If this happens, you may find yourself in a frustrating situation—one where leaving your provider becomes unnecessarily difficult. 
 
Unfortunately, this isn’t uncommon. Customers often find themselves "trapped" when MSPs put up barriers to prevent migration, such as withholding operating system images or only offering partial data backups. These tactics, while framed as “protecting intellectual property", are often designed to make leaving so expensive and cumbersome that the customer feels "forced" to stay.

The way a service provider handles offboarding is one of the most revealing tests of a company’s character. Doing the right thing, even when a customer is leaving, reflects integrity and long-term thinking. 

Why Relationships Fail 

MSP relationships can fail for several reasons, including: 
 
1. Lack of Investment by the Provider 
A provider’s priorities can shift over time. I saw this firsthand at a previous employer, where leadership began focusing heavily on SAP. SAP had a higher rate of return for every dollar spent. This meant resources were sapped away (pun intended) from JDE & EBS and funneled into the SAP business line. JD Edwards & EBS customers (once a priority) were squeezed for resources. This wasn’t because JDE or EBS were unprofitable but because management saw more profit elsewhere. 
 
2. Strategic Realignment 
As MSPs evolve, their goals may no longer align with their customers’ needs. Acquisitions, mergers, or shifts in market strategy often leave customers behind.   
 
3. Radical Cost-Cutting 
To maximize profitability, some MSPs reduce service levels to the bare minimum required to avoid breach of contract. This leaves customers struggling to maintain the level of service they initially signed up for. 
 
Even if you trust the people you’re working with today, circumstances can change quickly. A provider’s leadership or ownership might shift, bringing new priorities that no longer align with your business. 

Building a Strong Prenup: Transition Services 

Your contract should include a detailed transition services clause. Don’t rely on vague promises.

Here’s what to include: 

1. Ownership of Operating Systems and Databases 
The guiding principle should be this: customer systems are the customer’s systems; MSPs are merely custodians. Ensure that your agreement reflects this, explicitly stating that you own your operating system instances and databases outright. Demand the ability to replicate these instances to your new environment via storage-based replication. 
 
2. Removal of Provider Intellectual Property or Supplier-Provided Software 
If the MSP’s intellectual property (IP) or supplier-provided software needs to be removed after migration, establish a clear process: 

- Self-certification: The customer certifies that all provider IP and software have been removed. 
- Audit rights: The provider can verify this via screen share to confirm compliance. 
- Third-party software removal: Suppliers may have a contractual obligation to ensure that any third-party software they are licensing has been removed from the operating system instance. 
 
3. Account Reassignment for Public Cloud Environments 
If your MSP hosts your systems in a public cloud like AWS or OCI, insist on the ability to reassign the cloud account to your ownership. This minimizes disruption by avoiding the need for complex migrations. 
 
4. Cost-Effective Transition Services 
Get a clearly defined rate table with hours caps on the total number of hours. Differentiate rates for onshore and offshore resources to ensure transparency and fair pricing.  

Doing the Right Thing 

One of the reasons I joined Denovo was my experience migrating a customer away from Denovo while at a previous employer. I was struck by how frictionless Denovo made the process. Denovo worked collaboratively, doing everything in their power to ensure a smooth transition. It was clear that their focus was on doing right by the customer, even as they were leaving. That experience left a lasting impression on me and made me want to be part of a company that operates with that level of integrity.  Fast forward several years later and I’m the CTO of Denovo. 
 
Today, I’m helping a customer migrate their systems away from a European based MSP to Denovo. I’m seeing the same commitment of fairness by that European based MSP. The process has been cooperative and straightforward, with both sides prioritizing the customers' best interests. It feels good to see people in the larger ecosystem doing the right thing by customers. 
 
That being said, not all companies approach these situations in the same way. Some providers may put up unnecessary barriers to make these migrations painful. It’s a reminder of why clear agreements and expectations are so important. 

Denovo’s Commitment 

At Denovo, we’ve taken the Service Provider Clean Exit Pledge. We believe in empowering our customers with the freedom to move their systems whenever necessary - without unnecessary barriers or inflated costs. 
 
This is an open invitation for other JD Edwards Cloud Service Providers to join us in putting customers first.

Protect Yourself Before You Need To 

Just because your MSP relationship is strong today doesn’t mean it will remain that way forever. By addressing transition services upfront, you’re protecting yourself against unforeseen changes. 
 
Start your relationship with a prenup. It’s not about mistrust - it’s about ensuring you’re never in a hostage situation when it’s time to move on.