Everyone is migrating to the cloud these days. When you stop and think of it, cloud computing has worked itself into every aspect of our lives. Consequently, there are lots of cloud service providers available.
A service level agreement, or SLA for short, is vital to your cloud service subscription. This article answers the question, “What is a cloud service level agreement?” We will define the term, list the types, discuss its importance, and explore the steps, elements, and metrics to consider, as well as a cloud computing bootcamp designed to help aspiring professionals gain job-ready skills to navigate the vast career opportunities available in the cloud.
What is a Cloud Service Level Agreement?
A cloud service level agreement (SLA) is a performance bond negotiated between a cloud service provider and the customer. In the past, SLAs were negotiated between the client and the service consumer. Still, thanks to the advent of substantial utility-like cloud computing providers, most SLAs are standardized, making the client a large consumer of cloud services.
Few SLAs are enforceable as contracts. Most agreements or contracts like an Operating Level Agreement (OLA) might not be legally bound. Service level agreements typically specify parameters like:
- Service availability
- Latency or response time
- Service component’s reliability
- Each party’s accountability
- Warranties
Also Read: Virtualization in Cloud Computing: Everything You Need to Know
The Importance of a Cloud SLA
SLAs are essential since more organizations rely on external providers for their essential applications, systems, and data. Cloud SLAs set expectations and responsibilities for all parties, ensuring cloud providers fulfill specific enterprise-level requirements and give customers a clearly defined set of deliverables. The SLA also outlines financial penalties, like credits for lost service time, that fall short of terms and conditions.
The cloud SLA’s role is the same as any contract: a blueprint that governs the relationship between the customer and the cloud provider. These agreed-upon rules build a trusted foundation for the customer’s commitment to using the cloud provider’s services while reflecting the provider’s commitment to quality of service (QoS) and the underlying infrastructure.
The Types of Service Level Agreements
There are four primary cloud SLAs.
- Customer-level SLA. This agreement covers all services the customer uses, including service details, service availability provisions, the outline of responsibilities, escalation procedures, and cancellation terms.
- Multi-level SLA. This approach splits into multiple levels, integrating several conditions into one system, and is ideal for providers with many customers using their products at differing price ranges and service levels.
- Operational SLA. This approach defines performance relating to daily service operations like uptime and maintenance scheduling.
- Service-level SLA. This approach provides an identical service to multiple customers. For instance, if a service provider has multiple clients using its virtual help desk, it would issue the service-based SLA to all clients.
Also Read: Understanding Cloud Access Security Brokers: Safeguarding the Cloud Frontier
Elements of a Cloud Service Level Agreement
These are the common elements found in SLAs. However, every provider and program is different and may only include some.
- Agreement overview. This includes the SLA start and end dates, details of involved parties, and an included services overview.
- Description of services. This outlines all services provided within the SLA, detailing information like maintenance schedules, technologies and applications, turnaround times, and processes and procedures.
- Exclusions. This section describes all mutually agreed-upon exclusions and exemptions.
- Service level objective. The SLO is an agreement within the SLA regarding specific metrics like response time or uptime.
- Security standards. The service provider and client use security standards to outline the security measures and protocols. This typically includes non-disclosure agreements (NDAs) and anti-poaching agreements.
- Disaster recovery process. SLAs often detail disaster recovery processes and outline the mechanisms and processes to follow during service failure. This also includes information on the restarting process (e.g., alerts, restart times).
- Service tracking and reporting agreement. Both parties agree on performance metrics, with a reasonable tracking baseline before and after using the new cloud service provider.
- Penalties. This section clearly outlines penalties (financial or otherwise) that either side incurs should they fail to meet their SLA obligations.
- Termination processes. Sometimes, the customer wants to end the agreement. This section outlines notice periods and the circumstances that permit expiration or termination.
- Review and change processes. Clients should regularly review the SLA and all key performance indicators (KPIs) used to measure performance, with any large-scale changes in requirements recorded in the agreement.
- Signatures. Authorized individuals and stakeholders review and sign each party’s agreement to each item in the document. Once the agreement is in effect, both sides are bound by it.
SLA Lifecycles and Steps
Here are the typical steps involving an SLA.
- Discover a service provider. Identify a service provider that meets the organization’s needs and can provide required services. Do this by researching, requesting proposals, or contacting vendors.
- Define the SLA. Define the service level requirements and get an agreement between the cloud service provider and the organization. This means defining the service level metrics, objectives, and targets to measure the service provider’s performance.
- Establish the agreement. Once requirements have been defined, the client and service provider must establish an agreement outlining service terms and conditions. This agreement should include the SLA, non-compliance penalties, and monitoring and reporting processes on the service level objectives.
- Monitor possible SLA violations. Ensure the service provider meets its commitments by regularly monitoring the service level objectives. Report and address any identified violations on time.
- End the SLA. If the organization isn’t satisfied with the provided service or the service provider can’t meet the service level objectives, the SLA can be terminated, either through mutual agreement or the enforcement of non-compliance penalties.
- Enforce penalties for SLA violations. If the service provider is found to have violated the SLA, as outlined in the agreement, penalties can be imposed. These include reduced service level objectives, financial penalties, or agreement termination.
Also Read: What is Cloud Migration? Definition, Types, Process, and More
All About Cloud SLA Metrics
Here’s what you need to know about SLA metrics.
Abandonment Rates
The abandonment rate shows how many customers ceased their communication before receiving an answer from the customer service team. An SLA usually includes a very low abandonment rate.
Business Results
You can use mutually accepted key performance indicators (KPIs) to measure business results directly attributable to your SLA.
Error Rates
Clients monitor error rates to measure how often the service provider delivers a service level below customer expectations. This must be flagged if the negative interactions rise above a certain level.
First-call Resolution Rates
This metric shows how many customers had their issues solved by the cloud service provider during the first contact with a chatbot or help desk.
Response Times
This metric establishes the monitor’s acceptable response time. For example, the metric measures the average time from multiple locations if the maximum response time is two seconds. It’s considered enough if the average from all the sites is below two seconds.
Security
It’s vital to measure controllable security metrics, like antivirus updates and patches, to demonstrate the vendor is taking preventive measures to reduce unauthorized access.
Service Availability
This metric measures when a provider’s service is available, sometimes measured in time slots. For instance, an SLA may specify that the provider’s service will be available daily for a minimum capacity of 99.5 percent for a specific 12-hour window. But if your e-commerce platform receives orders 24/7, you’d need an SLA that guarantees availability of 99.99 percent, 24 hours a day.
The Advantages of a Cloud Service Level Agreement
- Better business goal alignment. SLAs ensure the offered service is in line with the client’s goals by establishing performance goals and service level requirements the provider must satisfy.
- Decreased downtime. SLAs help limit the effects of service disruptions by developing explicit protocols for issue management and resolution.
- Effective cost management. SLAs can help limit costs by specifying the customer’s anticipated service level and providing a way to track and evaluate performance.
- Improved communication. Cloud SLAs establish a better communication framework between the service provider and the client, explicitly outlining the degree of service the customer may anticipate. This ensures that everyone is on the same page.
- Increased accountability. SLAs offer customers a way to hold providers accountable should their services fall short of the standards. They also hold providers responsible for delivering a specific service level.
Also Read: What is Cloud-Native? Exploring Applications, Architecture, and Benefits
The Disadvantages of an SLA
- Complexity. SLAs can be challenging to create and maintain. They may require significant resources to implement and enforce.
- Limited liability. SLAs are not legally binding contracts. They often limit the provider’s liability in case of service failure.
- Limited-service options. SLAs limit the available service options, as the provider only offers the specified services outlined in the agreement.
- Possible rigidity. SLAs may be rigid or not flexible enough to accommodate the customer’s changing business needs or service requirements.
- Unbalanced incentives. SLAs might misalign the incentives between the cloud service provider and the customer. The provider might focus on meeting the agreed-upon service levels rather than providing the best possible service.
Cloud SLA Examples
Here are links to the cloud SLAs of the top three public cloud platforms. Many individual cloud services require separate SLAs.
Also Read: What Is Cloud Cost Optimization, and How to Do It?
Learn More About Cloud Computing
Cloud computing has spread to all areas of life, and plenty of career opportunities are available. If you want to learn more about cloud computing, check out this 32-week online cloud computing program You will explore the latest cloud computing and DevOps tools, frameworks, and best practices for a comprehensive learning experience.
According to Glassdoor.com, today’s cloud computing professionals earn an average annual salary of $97,608. Take this online course and see how it can help you improve your cloud computing skills.
FAQs
Q: What is a cloud service level agreement?
A: A service level agreement (SLA) is a performance bond negotiated between a cloud service provider and the customer.
Q: What is the SLA lifecycle?
A: An SLA lifecycle can include the following steps:
- Discover a service provider
- Define the SLA
- Establish the agreement
- Monitor possible SLA violations
- End the SLA
- Enforce penalties for SLA violations
You might also like to read:
What is Serverless Computing? Definition, Pros and Cons, How It Works, and More
What is Edge Computing, and Why Should You Care?
A Guide to Multicloud Strategy
