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Internap Reportedly Cuts Evergreen Rates Without Agents’ Consent

By Kelly Teal
August 08, 2011 - News

Days after news broke that Internap has terminated 30 master agents – and potentially hundreds of subagents – affected agents say the colo and cloud provider has lowered commissions on remaining partners’ contracts – without their consent.

Internap didn’t return an interview request.

An insider who requested anonymity said “no one" has signed on to Internap’s new, reduced terms, which apply not just to fresh deals, but to those long sold. As reported July 22, Internap has terminated most of its agents, and cut evergreens commissions to as low as 1 percent for partners still on the roster. Commission on renewals also is in jeopardy, although Internap appeared to be changing individual terms somewhat, depending on the level of resistance it’s getting from partners. Internap didn’t contest these facts in a short follow-up interview. Meantime, agents say the contract changes amount to a rewrite of the past but may not quite qualify as default because Internap is continuing to pay on those contracts.

When it comes to the agent and evergreen cuts, a lawsuit is rumored to be in the works.

For its part, Internap said it decided to trim its agent rolls after realizing it was paying evergreens to partners who sent leads – but then Internap did all the work.

“The evergreen clause created an ongoing annuity that undermines the urgency and incentive for supporting new business while creating a mismatch between cost and benefit for the agent program as a whole," Nelson Santini, Internap’s vice president of sales operations, told Channel Partners via email on July 22.

Why Internap made the move, all of a sudden, is a matter of speculation. There’s a credible rumor that the company is looking for a buyer and needs to make its financials look better by eliminating evergreen payments.

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