Four things to know about cloud SLAs

If you are thinking of signing up for a cloud-based service then be warned: you may not get what you expect for your monthly payment unless you know what to look for in the all important service level agreement (SLA).

Here's a guide to four key points you should take into account when signing up for a cloud service.

1. Availability

Is it measured monthly or annually?

Arguably the most important term in an SLA covers service availability - the proportion of time that it will actually be working. It is usually expressed as something like 99.99% availability - which equates to less than five minutes of downtime per month - and if the service provider fails to meet that measure then penalties apply.

If your business depends on the cloud service to the extent that it couldn't tolerate an outage of longer than five minutes, then an SLA offering 99.99% availability may look perfectly suitable.

But it's important to understand exactly how this is measured, warns Cal Braunstein, chief research officer at the Robert Frances Group. 99.99% measured on a monthly basis has very different implications to 99.99% measured over twelve months, he points out.

"If it is measured on an annual basis, then the service could be down for 30 minutes or more in one month, and you would have to wait until the end of the year just to find out if the SLA has been breached," he says.

2. Planned downtime

How much is involved, and can you skip it?

Even if 99.99% availability measured over a year is acceptable to your business, should you really expect to get that level of availability?

Probably not, according to Braunstein. What many service providers actually offer is 99.99% availability during 'scheduled uptime,' but not during what they call 'planned downtime' when the provider carries out regular maintenance and upgrades.

Some providers give themselves the right, in the small print of the SLA, to something like "up to 30 minutes of planned downtime once a week on a Sunday morning, at some time between 2am and 5am."

The benefit of planned downtime is that it enables the service provider to introduce new features or eliminate bugs in the software.

Robert Mahowald, a research vice president at IDC, recommends shopping around different service providers to see how much flexibility they offer when it comes to this type of maintenance: depending on your business you may benefit from the new features or you may prefer not to have a service interruption.

"You need to see if you are offered a choice when it comes to planned downtime. Some SLAs allow you to skip one major upgrade or perhaps three minor upgrades if you don't want the downtime," Mahowald says.

3. Service interruptions

Who starts the clock when a service is disrupted?

Another reason that you may not get 99.99% availability you expect is because of how it is measured. If a problem occurs then it may take a few minutes before you notice that anything is amiss, and a few more checking your own systems and network connectivity before you identify that the problem is at the service provider end.

Generally speaking, it's only once you tell the service provider that you are experiencing an interruption that the clock actually starts: the time the service was unavailable before this usually doesn't count in the SLA.

"This effectively gives the service provider a grace period of five or so minutes each time there is an interruption, and it is up to the buyer to understand the definition of how outages are measured," Braunstein says.

For smaller companies this grace period may turn out to be even longer, because if an outage occurs in the middle of the night it may never be detected and reported before it is fixed.

4. Liability

What's the limit?

Aside from availability, most SLAs deal with the penalties that apply if the service provider breaches the agreement. These generally take the form of service credits or reductions from the monthly bill, and only rarely will they result in actual payments being made by the service provider to the customer.

Even when they do, expect the SLA to limit the liability of the service provider. It's important to check the exact limit of liability but it is unlikely to be more than three to four times what you pay the service provider each year.

In other words, don't expect there to be much of a connection between any compensation and the actual loss your company could suffer if the service is unavailable for an extended time or if your data becomes corrupted. If you need better protection, consider some form of third party insurance.

So what can you do if you find that the SLA offered by a service provider doesn't suit you? Large enterprises can certainly negotiate SLA terms, but for most SMBs this simply isn't an option. That's because service providers have to offer a uniform service at scale to smaller customers in order to drive prices down to competitive levels.

"A lot of companies simply don't know what to look for when it comes to SLAs, and that means that a significant proportion of service provider customers just take whatever service level agreement they are offered," Mahowald says.

A more sensible approach is to shop around while bearing in mind that, when it comes to service level agreements, the devil is in the detail.