In response to your message I would like to address the "free storage",
and/or "free stuff", and the term of hostage fees.
Ever hear that you never get something for nothing? Well that is true in
most cases, any time something free is being offered up front you can bet
that they are making it back up somewhere within the terms of the contract.
Many times this is where the "hostage" fee comes into play. What you have
been given "free" up front is contractually written in to be re-cooped at
the end of your contract. Many, many times this equates to such a high
dollar figure that most companies will just stay put and settle for whatever
price increases are presented rather than pay an exorbitant amount of money
in lump sum.... hence the word "hostage", you have to pay a huge ransom to
get yourself free again.
----- Original Message -----
From: "eton SINGLETON" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Tuesday, October 07, 2003 1:04 PM
Subject: Re: "Paperless" - Preserving Media as a RM - How to impress IT and
> I'm new to this listserv environment and have been watching the posts for
> the past week now and have seen a few comments mentioning situations with
> storage vendors and am interested in finding out more. My name is Rich
> Singleton, and I'm based outside of Atlanta a=nd I'm happy to meet you all
> I've recently moved into Records Management from the IT environment and am
> working on a pilot electronic records management program for our financial
> services organization. It will involve both records created at the
> level, received from the outside and our media repository where we store
> backups from our servers.
> My current interest is storage and more specifically, off-site providers.
> We are investigating the use of some third party services to store and
> manage media for us (present contracts are expiring and we're outgrowing
> own space) and we want to try and keep from storing all of our eggs in one
> basket, so to speak.
> Some of the quotes we're getting are offering things like "first year
> and "free move-in" along with incentives if we store all of our media with
> one firm, even if it's in different locations. Naturally, there has to be
> some catch with this, but I'm not at a point yet where I've been able to
> figure out just what it is.
> I've seen mention here of "hostage" fees and something called "evergreen
> clauses" and I'm not familiar with these terms. When I asked one of the
> vendors about them, they sort of stared blankly at me and didn't have an
> answer for me about them.
> I noticed this comment in the message from Hugh Smith and was wondering if
> anyone could fill in the blanks on what this is about?
> >international players will soon be trying to raise rates, lock in
> >longer terms and add "Evergreen Clauses" to prevent movement from bulk
> >warehouse type conditions to companies who offer secure media storage. I
> >have heard from a number of RM's that notices of large price
> >increases are already on their desks.
> I was a bit confused about the comment regarding price increases, as when
> you have a contract, doesn't that lock in your price for the term of the
> contract and then you renegotiate rates at the end of the term, and if you
> don't agree with the rate, you simply find another vendor?
> Also, there was this comment in the message that I wasn't too clear on-
> >Evergreen Clauses, Average Minimum Storage Volumes, Split Fees all work
> >make Media Storage Contracts incomprehensible! These efforts to do to the
> >media storage industry what "Hostage Fees" did to paper storage need to
> >discussed with your executives.
> >Attempts to lock in clients into inflexible contracts so media cannot
> >to better security, better environmental control and better
> >service open the door for price increases without improved service or
> I'm not familiar with the terms so, I guess they're already
> for me =). Our present vendor is in the process of improving their
> environmental controls and has informed us there is likely going to be an
> increase in storage costs to have our media included in this improved
> storage environment. We've had a contract with them for a number of years
> and as new contracts were negotiated, the rate increases were
> What do I need to be concerned about when I'm trying to negotiate so I
> get locked into inflexible contracts or subjected to hostage fees?
> I would appreciate any input from those of you who have experience in this
> area, as it seems there are a lot of things I need to learn. I'm sure
> have more questions as this process moves forward and I look forward to
> whatever help anyone could provide me.
> Thank you
> Rich Singleton
> [log in to unmask]
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