Part of running an organization is to engage and select various outside services that provide technology resources to help you reach your business goals. Most organizations use some form of managed hosting, data center colocation, or cloud service which are all backed by a Service Level Agreement (SLA). The formal use of a Service Level Agreement is to formally define a level of service expected, and this usually is part of a service contract. A lot of verbiage such as Mean Time Between Failures, Mean Time to Repair, Mean Time to Recovery, 99.99% uptime are all part of your SLA which will vary a bit service to service.
The biggest psychological shell game to most SLA’s is the uptime reflected in how many 9′s after 99% do you have, rather then the combination of the trigger how many 9′s after 99% and what do you actually receive in the case the 99.99% uptime is violated. One is a trigger for the other, however most organizations focus on the trigger but not the actual amount of compensation if the trigger is exceeded.
Compensation typically ends up being a days worth of credit or at best a months worth of credit, both of which do not come close to covering the cost of losing services or hindering your business due to a service outage or degradation of several hours or days. Where SLA’s become more important is to set a baseline of what is expected from a service. Though compensation typically is nothing compared to the impact of your business, what is important is that if SLA’s are repeatedly violated you can negotiate out of a service contract, or negotiate better pricing for the service moving forward. Most businesses realize that when they violate the SLA they set, that you will leave at the end of your contract or immediately which impacts there revenue moving forward. Simply put some money is better then no money and as long as there is some margin of profit they would rather keep you then lose you. This is where collecting data over time is important.
When you collect data specifically from a third impartial party you then begin to build your own baseline of reality in regard to service uptime. This helps you in two ways, one by giving you the understanding you are getting what you pay for helping you make decisions on what service provider to use or not use, and two to use the data for negotiating purposes and concessions. Now instead of getting a one day or one month credit on your account that is insignificant you can possibly renegotiate a new service contract at a significantly lower rate which might equal 4 months of credits continually year over year.
The key is to let the data enforce the SLA. Data does not lie especially if collected from an impartial unbiased third party. Most organizations fail to keep the service providers they are using honest, and often times do not realize SLA’s are being repeatedly violated. A service such as Systems Watch helps you get an understanding of whether an SLA is being violated and offers a level of transparency in regard to the services you use. So the next time your read over your Service Level Agreement keep these points in mind.
