Decoding SLA’s

In preparing and signing a Service Level Agreement (SLA) with a provider of cloud applications, companies need to ensure their needs are properly described and protected. With these agreements defining items like allowable downtime, or reimbursement in the event of time lost, companies need to be rigorous in ensuring terms and definitions are as clear as possible, to ensure their cloud applications remain operational and accessible to their specifications. In a review of these Service Level Agreements, Network World has noted three common errors or misunderstandings in these agreements that can have a significant impact on a company's bottom line and productivity:

1. Uptime does not always mean usable time — Agreements often define downtime as being only time when the service is inaccessible, rather than unusable due to maintenance or performance degradation

2. Monetary penalties do not provide full compensation — Compensation in the event of lost resources often kicks in only after severe and extended disruptions to service, and will not cover damage to customer relationships caused by lack of access.

3. Agreements do not always scale with demand — an agreement may define the resources and support required at the time of signing, while the actual resources required may change over the duration of the agreement. Renegotiation windows should be considered to allow for flexibility by the customer