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Why Service Level Agreements Count for Cloud Computing

by Robert Desisto  |  July 11, 2012  |  5 Comments

In the past few weeks there have been major outages by a high profile cloud infrastructure provider and a large SaaS vendor, both of whom have had a reasonably good track records. Unfortunately, much of the attention in the press and even by some analysts has been devoted into what went wrong versus providing advice to customers on what to do to protect themselves. Explaining the circumstances that led to an outage maybe technically interesting and provide some insight into overall risk of a provider but how does this help a customer or a new customer of the cloud service. I think the most interesting comment by someone was that one of the affected cloud providers was down for several hours but was still within their uptime commitment for the year. Huh? That is supposed to be the good news.

There is one very simple lesson customers needs to take away from these high profile outages, a service is only as good as a cloud provider is willing to back up with an SLA. As in the financial markets, past performance does not dictate future performance. Just because a vendor has had a good track record for uptime does not mean they will have good uptime in the future. Gartner has published research on best practice SLAs and will go a long way to helping customers to protect their interests when contracting for cloud related services. Don’t take a vendors word, or track record get commitment for performance.

Category: cloud-computing  software-as-a-service  

Tags: saas-cloud-computing  

Robert P. Desisto
VP Distinguished Analyst
14 years at Gartner
24 years IT industry

Robert Desisto is a Vice President and Distinguished Analyst in Gartner Research. He is responsible for managing the software as a service (SaaS) research agenda. His research focuses primarily on the use of SaaS as a delivery model for applications. Read Full Bio

Thoughts on Why Service Level Agreements Count for Cloud Computing

  1. Tracy Kinsey says:

    Great blog post! I have found that many of my customers appreciate the financially backed 99.9% SLA provided by Microsoft Dynamics CRM Online. It is a big differentiator when competing against other SaaS CRM vendors and brings a piece of mind to the IT and business teams evaluating the solution.

    – Tracy

  2. Nice blog! Cloud computing delivers hosted services on the internet. Cloud services has many advantages and the IT services are replacing cloud services. It has become very important. Thanks for sharing this post.

  3. Yashpal says:

    The service seems the ultimate service of the future. With more and more lapses and outages, SLA’s for cloud computing is a great tool-cum-parameter for the devices and the provider service itself making it a legitimate serving to the industry and to clients.

    Though this being in nascent stage of high industry acceptance worldwide, it would be a benefit for organizations who would like to make it a part of the business model.

  4. Steve Noble says:

    While SLAs are important, they never make the customer whole. Many SLAs provide for discounts or pro-rated services not to exceed what you pay for said services.

    Service credits can be even worse. What happens if you decide after a preventable failure of your provider to leave? The service credits are worthless to you.

    My last comment on SLAs is that you never want to use them. Using them means you suffered enough of an outage to affect your business income.

  5. These outages are indicative of design flaws and a lack of mitigation of risk. You design in the reliability and fault tolerance you need.

    The challenge is can Cloud providers do this adequately for their customers?

    The SLA portion is merely a mechanism to set a standard to design to. While there may be monetary refunds,service exemptions, and rebates, if the service doesn’t live,it doesn’t live.

    There is another danger- SLAs in some cases are written by folks that understand the bill but lack understanding of what it takes to technically deliver.

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