A Service Level Agreement (SLA) is a contract between a service provider and the customer. The agreement defines the level of service that will be provided and agreed upon by both parties. It also states what will happen in case the agreed services fail to meet the expectations.

Why is a service level agreement (sla) important?

SLA is an important consideration for any business to take into account. This way, they can take preventive measures by understanding how to work towards improving their SLA or improve their service-based offerings in order to satisfy their customers’ needs and expectations.

What are the aspects of SLA?

With the help of an SLA, businesses can define and enforce solid expectations and agreements with their customers. Often, companies use an SLA to align themselves with regulatory requirements such as those from HIPAA or GDPR.

In order for an SLA to be valid and enforceable, it should have the following elements:

  • Objectives: objectives are usually specified as a result of a service agreement. They describe what each party expects from the relationship.
  • Service deliverables: these are items required by both parties that help to ensure that specific objectives were met or exceeded during a given contract period.
  • Performance standards: these are minimum standards that must be met during a contract period in order for a project to be considered successful.
  • Compensation: The agreement should mention what will happen when one party fails to meet their agreed upon obligations. This could be monetary or non-monetary compensation for the other party, often in the form of credits or discounts on future services.
  • Changes: These addresses situations where either party wants to make any changes to the agreement due to changing market conditions or wants to make adjustments according to their business requirements.

What are the types of SLA?

Service-level agreements are categorized into three types:

These include customer-based SLAs, service-oriented SLAs, and multi-level SLAs.

  1. Customer-based SLA: A customer-based SLA is a contract between a company and a customer. It outlines what services will be provided by the company and what level of quality is expected from the company in return for compensation from the customer.
  2. Service oriented SLA: This type of agreement is between two companies which have an ongoing relationship with one another. which the service which is supposed to be provided is agreed upon by the two parties. The service can be anything like installation, maintenance, or repair. It focuses on the services provided by the provider.
  3. Multi-level SLA: is a type of SLA in which there are different levels of service, depending on the business needs and capabilities of both parties. These levels are usually based on requirements like time, cost, and quality.

Why is Service Level Agreement important in cloud computing ?

When it comes to cloud computing services, SLA has become increasingly important because of increasing complexity in IT environment. For example, few IT providers may only guarantee 99% uptime but would charge more than those who guarantee 99.5% uptime. This particular aspect of SLA is very important these days because downtime can lead to significant losses in revenue for any business that depends on technology to function at maximum capacity.

In addition , it defines who owns data and what will happen if there is a disaster. This agreement will lay out what responsibility each party has with respect to data, its protection, and how failures are dealt with.

What Are SLA metrics in cloud computing?

Service Level Agreement metrics are a set of tools that measure the level of service that is met over time.

SLA metrics can tell you how well your service is performing. They can help you to take a look at what needs to be improved and what should stay the same. These metrics allow for an accurate reading on the health of your business and how it performs against its competition.

Depending on the type of service, you should define the SLA metrics that can be monitored. In general , you can break them into the following :


The term “availability” in this context is the measure of how much of the time during an agreed-upon period that a given system is running and ready to use by its intended audience under normal operating conditions. It can also refer to the rate at which data stored on an information system are retrieved successfully by users when requested for use.

Error rates

That way they can quickly identify problems and work on fixing them before they become larger issues that affect other parts of their business. This will also help them track any issues that may arise with their provider such as backups failures and system/network errors and make the required recovery action.

Response time

The response time is all about how long it takes for an IT service to be delivered after it has been requested.

It is a measure of how well a system or service meets the predetermined levels of performance. This metric is calculated by measuring the response time and MTBF (Mean Time Between Failures) and MTTR (Mean Time To Repair).


Network and system breaches are costing companies dearly. Controllable security measures should be taken in place such as system patches, network monitoring , antivirus updates and all preventive measures required.


The utilization metric is also known as the percentage of use of your cloud system’s resources. This metric is usually expressed in percentage points, so you can compare it easily with other metrics.

The utilization metric has a number of uses. One way it can be used is to check if your cloud system can handle the additional load you are asking for without any outage. Another use would be to determine which resource type should have its capacity increased so that the system can run at maximum efficiency, or which resource type should be reduced so that the system runs at a lower cost.

Service Level Agreement (SLA) Best Practices

A clear service definition is the first step in creating an SLA. It’s important to make sure that an SLA is measurable and specific, so it’s easy for both parties to understand and decide if it has been met.

The SMART acronym can be used to define the goal of any agreement: Specific, Measurable, Achievable, Realistic, Timely. Separate SLAs should be created for every IT service so that the customer knows what to expect from each one.

When we want to better our understanding of the customer‘s desired outcome, we need to align SLAs with that outcome. This includes exceptions that are usual or unexpected. Finally, SLAs should be reviewed periodically with any updates being made accordingly so they are always up-to-date with current needs