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SLA (Service-Level Agreement)

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An SLA is a contract between a service provider and a customer. The service provider may be a telecommunications carrier, an Internet service provider, or any company that provides outsourcing services. The services provided may include dedicated leased lines, shared packet-oriented services, Web hosting services, off-site application management (i.e., ASPs), and off-site network management (i.e., MSPs). The SLA specifies the terms of the agreement and how much the customer will pay for those services. For example, an SLA between a telecom carrier and its customers may specify the following:

  • The minimum bandwidth that will be provided

  • The amount of burst bandwidth that the customer can use over the minimum and the charge that will be applied to that bandwidth

  • The amount of time the service provider guarantees the service will be up and running, usually a percentage such as 99.95 percent of the time (which translates to approximately 5 minutes per day off-time)

  • Penalties for not meeting service requirements (e.g., an extra amount of free service in the next month), or nullification of the contract if the provider continues to fail to meet its requirements

  • If the service is packet oriented over shared links, the level of QoS that will be provided for specific types of services (e.g., prioritization for real-time traffic such as voice)

  • Equipment setup, on-site service assistance, and help desk support

The terms of these contracts are often worded with phrases such as outage duration (the amount of time a service is down), mean time between failures (the amount of time between service failures), time to restore (the amount of time to bring a service back up), trouble rate (the number of on-site service calls or phone calls allowed), and quality of service. Quality of service has its own set of terms, such as CIR (committed information rate) and CIBR (committed burst information rate), which specify, respectively, the specified data rate and the ability to burst over the specified data rate.

Web ProForums hosts a tutorial called "Carrier Service-Level Agreements (SLAs)." The Web site is listed on the related entries page. Among other things, the tutorial discusses where performance measurements and troubleshooting should take place: in an end-to-end (from the customer premise location) configuration or within the cloud (carrier switch to carrier switch). It also provides the formulas for various SLA service-level components (measured over a month), including network availability, PVC (permanent virtual circuit) availability, average round-trip network delay, average round-trip PVC delay, effective PVC throughput (frame delivery ratio), mean time to respond, and mean time to repair or restore.

In the telecom world, customers now typically specify the requirements for their service contracts. This change from the past is due to the availability of competing services. Customers can now write up contracts in the form of requests for proposals and submit those to the various providers in their area, and then choose the best. Another reason control over contracts has shifted to the customer is because customers have much better tools for monitoring and logging service levels. In the past, it was difficult to track when service levels were not being met, except when the service was completely down.

While customers may have the upper hand these days, requests for services should be reasonable. A provider may be more than willing to sign a contract for services it cannot meet in the hopes that the customer might be overstating its needs. Customers are often faced with contracting for services when the required service levels are not even known. It may be beneficial to sign short-term agreements, paying a little more than usual just so service requirements can be measured over the particular service being offered.

The Web sites listed shortly offer useful information on formulating service contracts and the things to watch out for. Several magazine sites are listed that provide extensive information about SLAs.

Copyright (c) 2001 Tom Sheldon and Big Sur Multimedia.
All rights reserved under Pan American and International copyright conventions.