Cloud SLAs: Clearing the Air

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The legendary film producer Samuel Goldwyn reportedly once said that “a verbal agreement isn’t worth the paper it’s written on.” The authenticity of the quote is questionable — Goldwyn denied ever saying it — but the underlying sentiment couldn’t be more certain. Well-defined contracts are essential for helping the parties in any sort of agreement avoid misunderstandings that could sour the relationship.

In the IT world, the service-level agreement (SLA) has long been a critical component of contracts between customers and service providers. The SLA clearly defines the level of services being delivered, ensuring that the customer knows what to expect and spelling out what must be done if requirements aren’t met.

The rise of cloud computing has magnified the importance of SLAs. With organizations moving more of their critical data, applications and network services into the cloud, ground rules that clearly define expectations are essential for minimizing business disruption, confusion and costly disputes.

In a recent report on best practices in cloud contracting, researchers at the University of North Carolina recommended that cloud contracts should specify service level parameters, minimum levels and specific remedies and penalties for non-compliance with SLAs. Typical items for inclusion in SLAs are uptime, performance and response time, error correction time, and infrastructure and security requirements.

The researchers also advise that SLAs include a section that clearly defines pertinent terms such as downtime, scheduled downtime, etc. These definitions eliminate ambiguity in contract enforcement and provide specific mechanisms for calculating compliance with the SLA.

For example, an SLA may promise 99.99 percent availability. But how is availability measured? If a provider averages their SLA over the year, downtime can vary significantly from month to month, and you can’t determine until year’s end if the SLA has been breached. Additionally, most availability guarantees will exclude “planned downtime” for regular maintenance and upgrades. Be sure to find out when these service interruptions are scheduled so you aren’t caught off guard.

Most SLAs offer a credit on a future bill as compensation for any violation, so it’s important to negotiate the highest possible credit. Give IT and finance a seat at the table to analyze the technical requirements and the business impact of these requirements.

Cloud computing offerings such as’s Infrastructure-as-a-Service solution deliver undeniable benefits, relieving organizations of much of the cost and management burden of implementing and maintaining new technologies in-house. We understand that clarity is king when it comes to cloud computing SLAs. We welcome the opportunity to discuss our cloud portfolio and the service levels you require to support your business needs, help you reduce costs and improve your disaster preparedness.