Making sense of cloud-based SLAs

Service-level agreements have become the master link in the chain that connects IT departments to cloud service providers, making it essential for IT managers to understand how SLAs can make or break a services relationship.

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Many IT managers are in the process of moving applications and services into the cloud. Some are forced to consider cloud-based computing due to economic reasons, while others are looking to create new IT services. Regardless of the reasons, IT managers will have to deal with a service-level agreement (SLA) sooner or later.

Evaluating SLAs can be uncomfortable for many IT managers; after all, most SLAs are filled with legalese and contractual language that can make it difficult to quantify what exactly a vendor is offering. 

Further complicating things is that most SLAs are written to protect the vendor, and not so much the customer. Most vendors create SLAs as a defensive shield against litigation, while offering customers minimal assurances. That said, SLAs can still be a powerful tool for IT managers looking to choose a cloud vendor and arrange for the best services available.

IT managers need to focus on three areas with SLAs: Data protection, continuity and costs. Arguably, data protection is the most important element to understand. IT managers will want to make sure that who has access to the data and what protections are in place be clearly defined. At first blush, determining levels of protection seems rather straight forward, but there are some hidden issues to be aware of and IT managers must perform due diligence and address those issues.

Many of these questions could raise thorny issues about how intellectual property is protected. It all comes down to who ultimately has control of the customer's proprietary data.

An IT manager will need to understand how the vendor's infrastructure and services are utilized to provide persistent access to needed applications and data sets. Continuity is important. In a perfect world, a vendor could guarantee access 100 percent of the time, but in reality, a guarantee like that is impossible.

All service providers will experience downtime at one time or another, simply because there are situations that are beyond their control, ranging from natural disasters to interruptions in the public infrastructure. At best, most service providers offer an assurance of 99.5% uptime, but there is usually some legalese surrounding that assurance. Even so, a vendor can make a reasonable attempt to guarantee an acceptable level of service. With that in mind, the real question here becomes what happens when service is interrupted?

Combined, the answers to these questions can be indicative of the level of service that a vendor can and will provide. More importantly, those answers will dictate how well an IT department can deal with an interruption and how that interruption will affect the users.

Some vendors include a pricing element in their SLAs, while others will define fees and charges under a separate contract. Either way, it is important for an IT manager to understand the costs involved with a cloud based service. Not only are those costs relevant to budgets, those costs are also used to determine return on investments. Cost analysis may be best left to members of the purchasing or accounting department, but IT managers can help to speed the process and perhaps obtain funding for a cloud service by looking for some simple explanations when it comes to costs.

Finding answers to these questions and the others outlined above can help an IT manager make an informed and intelligent decision when it comes to selecting a service provider and building a long term relationship with that provider, while keeping services affordable and reliable at the same time. It all comes down to minimizing the legalese and applying common sense to service level agreements.

This was first published in June 2009

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