Q: My organization is looking at a new data solution and all of the potential service providers keep talking about 5-9s. What is this and what does it mean to me?
A: Network availability is a primary concern for organizations relying on both voice and data communications. 5-9s refer to a network being available 99.999% of the time. In the service provider world this equates to a local phone company's central office switch going down for approximately three minutes every 40 years.
It is important to know your network availability as well. To determine this, divide the seconds the network was down by 31,536,000, the number of seconds in a year. For an organization, 5-9s equals five minutes and 15 seconds of downtime every year.
Depending on the type of company, there may be state or federal laws that mandate a specific network availability requirement. Some utilities, for example, have to maintain 99.9997% to ensure customers are not left without service.
Q: One of our contracts expires next month and the provider has told us that unless we renew, we are going to go on tariff rates. What can we do in the future to avoid being forced into a renewal just to avoid higher prices?
A: The biggest enemy you will ever have in the contract negotiations process is time. Providers count on organizations waiting until the last minute to begin negotiations or hurriedly signing whatever document is put in front of them. The best way to give your organization the upper hand is to negotiate an end-of-term option. This gives the flexibility to extend an existing contract by one, three or six months and provides rate stabilization as they will not change during the agreed-upon extension period. In addition, you will gain leverage as the added time will put the clock on your side.
To mitigate your current situation, consider adding an end-of-term option to your renewal contract. This will give you time to explore all potential provider offerings to choose the one that is right for you.
For more visit www.aotmp.com.
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