Service Level Agreement (SLA)

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Service Level Agreement (SLA) is a formal written agreement made between two parties: the service provider and the service recipient. The SLA itself defines the basis of understanding between the two parties for delivery of the service itself. A service-level agreement (SLA) is a contract between a service provider and its internal or external customers that documents what services the provider will furnish. The document can be quite complex, and sometimes underpins a formal contract. Generally, an SLA should contain clauses that define a specified level of service, support options, incentive awards for service levels exceeded and/or penalty provisions for services not provided. SLAs originated with network service providers, but are now widely used by telecommunication service providers and cloud computing service providers. Corporate IT organizations, particularly those that have embraced IT service management (ITSM), enter SLAs with their in-house customers (users in other departments within the enterprise). An IT department creates an SLA so that its services can be measured, justified and perhaps compared with those of outsourcing vendors. SLAs measure the service provider’s performance and quality in a number of ways. Some metrics that SLAs may specify include:
  • Availability and uptime — the percentage of the time services will be available
  • The number of concurrent users that can be served
  • Specific performance benchmarks to which actual performance will be periodically compared
  • Application response time
  • The schedule for notification in advance of network changes that may affect users
  • Help desk response time for various classes of problems
  • Usage statistics that will be provided.
  • In addition to establishing performance metrics, an SLA may include a plan for addressing downtime and documentation for how the service provider will compensate customers in the event of a contract breach.
SLAs, once established, should be periodically reviewed and updated to reflect changes in technology and the impact of any new regulatory directives (changes to the PCI DSS standard, for instance). Service-level agreement (SLA) negotiation with an enterprise data storage vendor can be a crucial factor in the success of any new technology in your infrastructure. However, the effectiveness of an SLA comes down to ensuring that the terms of the agreement actually meet your storage needs and requirements.