Comment by mattbrewsbytes
6 hours ago
1. Risk - you throw an SLA on services and can point fingers when shit hits the fan
2. Circular agreements - you get them to sell your goods/services in the region of their home country
3. These count as "Services" on the P&L and provide massive tax advantages to the company because these aren't treated as labor costs.
This may be from an old context in my brain since I worked with some of those companies, so those reasons may have changed or impact may have with various regulations, etc.
Addendum to risk: larger companies can throw bodies at escalated issues.
Good luck trying to get a 6 person shop with a full calendar of other-customer work to suddenly prioritize a show-stopping bug that's only affecting you.
Oh totally. This is a playbook for a Fortune X00 company. Layoff your staff and create a "services" SLA contract with a third party company to deliver IT services. Just the legal team to get thru all the docs alone means you need a legal and procurement/contracts department. Not for startups.