3 Replies Latest reply: Mar 15, 2012 1:46 PM by klinejw RSS

Service level agreements - do they ever *not* give us headaches?

Nonapeptide

When I asked about "What does it take to satisfy you when testing if a service is available or not?" the topic of SLAs came up. Specifically, user MSimmons said "Re: What does it take to satisfy you when testing if a service is available or not?

That got me thinking about SLAs - specifically the times that I've been let down by them. My latest example is a VPS that I keep around for my business. The VPS has had poor uptime because of the service provider's networking devices that are in front of it. One time it went down in a bad way. Like, almost two days of being unavailable. Suddenly I couldn't rely on it for client-facing operations. My business's reputation was tarnished. Clients were then wary of using that part of my offering. Things got a bit uncomfortable. "No problem!" I thought. "I've got a SLA!"

As it turns out, my SLA has a tiered structure of credited service. 10% downtime results in a certain percentage off of my next bill. 20% increases the percentage, and on until, at a sufficiently high percentage of downtime, my account gets a completely free billing period.

Awesome! So now I don't have to pay for a service that I can't rely on! That's... just... super. What's worse is that if, as a result of the downtime, I perform a hasty migration from the service, I'll get a credit on my account to go towards the next billing period... except I won't be using their services anymore so I'll essentially get nothing for my trouble.

How do you negotiate SLAs? What are some gotchas that you've encountered? Is there any specific provisos that you've learned to either be wary of or demand be included? How do you ensure that you'll get adequately compensated for the downtime that a service encounters? How do you handle remuneration from an SLA? Do you have any good (or bad) SLA stories?

 
  • Re: Service level agreements - do they ever *not* give us headaches?
    dtimko

    One thing to keep in mind is that in general SLAs won't ever cover your "loss" due to an outage. Nor should they, considering your business gain from that $X VPS is probably multiples of X (if it isn't, you shouldn't be using it). That is what you should carry business insurance for. You can never fully transfer risk to a service provider. If you do, you will see the premium in that monthly price for sure.

    On the flip side, you should definitely review your SLA - not all 100% or 5 9's uptime SLAs are equal (or even close) as you found out. It is all about how the penalty structure is written.

    • Re: Service level agreements - do they ever *not* give us headaches?
      Nonapeptide

      One thing to keep in mind is that in general SLAs won't ever cover your "loss" due to an outage. Nor should they, considering your business gain from that $X VPS is probably multiples of X (if it isn't, you shouldn't be using it).

      I've only seen a few SLAs that addressed a company's business losses in case of an outage, and if I recall correctly they were all communication circuit SLAs. For example, if you could adequately quantify how much actual business you lost as a result of your main T-circuit going out, the communication company would re-imburse you for it. However, the trick is to make sure you monitor and quantify your business transactions in a way that the service provider agrees is accurate and well-defined in the SLA itself. And yes, at that point the SLA is something like business insurance and you certainly pay some serious money for transferring that kind of liability to the service provider.

      • Re: Service level agreements - do they ever *not* give us headaches?
        klinejw

        Most of the service level objectives (SLO's) that we deal with at our company are written by business people that don't understand the technology that they are writing the SLA for.  If anyone were to ever challenge one of our SLA's legally there wouldn't be anything to contest because of how vague the objectives and measurement methodologies are defined therein.  To answer your questions - Yes, they are always a headache.