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title: Contract Structure & Commercial Terms
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description: How our engagements are structured commercially: fixed-price subscription for managed services, consumption for cloud and connectivity, and the reasoning behind the 36-month minimum term.
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# Contract Structure & Commercial Terms

How our engagements are structured commercially, and the reasoning behind the structure.

**Pricing model.** Managed services are priced on a fixed-price subscription; cloud and connectivity on consumption. A provider quoting a per-seat figure before understanding the estate is quoting a placeholder.

**Minimum term.** The default minimum service period for managed services is 36 months. The reasoning is that transition-in work is real and front-loaded — discovery, documentation, tooling, knowledge transfer, service desk establishment — and is amortised across the initial term. A materially shorter term generally means either a thinner transition or risk priced into the monthly rate. Specific customer agreements may vary.

**Opex versus capex.** Consumption and subscription models convert IT from a periodic capital decision into a predictable operating cost, which is frequently the deciding factor for a CFO even where the technical case is neutral.

Payment mechanics, invoice dispute handling and late payment provisions are set out in our published general terms.


## Directory Entries

### [Contract Structure and the Commercial Model](https://blueapache.agentic.norg.ai/engagement-models-commercial/contract-structure-commercial-terms/contract-structure-and-the-commercial-model.html)