Cloud computing is the delivery of on-demand computing resources and services over the internet on a pay-for-use basis. We examine the key components of cloud service level agreements (SLAs), which govern acceptable service delivery and satisfactory customer usage of cloud computing services.
From a technology perspective, one of the key components of the European Commission’s ‘Europe 2020’ vision is the digital economy. In 2014, a Cloud Select Industry Group sub-group published standardised guidelines for cloud computing service level agreements (SLAs) between cloud service providers and business customers. In July 2016, the SLALOM cloud computing initiative – building on this earlier work – delivered the final version of its model contractual terms and SLAs for cloud computing. SLALOM describes itself as a “major step forward for the cloud industry, promising to lower the barriers to entry for SME cloud providers and make it easier for end users to safely migrate to the cloud.”
But if a supplier decides not to adopt the voluntary SLALOM terms immediately, what should a customer look out for when faced with the supplier’s standard SLA? And what are the core provisions that all SLAs should define?
What is the cloud?
Cloud computing essentially involves a model of delivering technology through on-demand network access to a shared pool of computing resources. When a customer purchases cloud computing services, it is purchasing a ‘virtual machine’ that behaves like a physical computer, but which actually utilises resources from numerous interconnected servers. The customer in turn benefits from economies of scale and avails of lower costs in obtaining their IT services. There are different forms of cloud services - a customer may access software (SaaS), infrastructure (IaaS) or platform applications (PaaS). Cloud services can be provided through public networks, private networks or a mix of public/private networks, known as hybrid.
What is a service level?
A service level is a mechanism that defines the expectations and level of service that a cloud service supplier must meet. Service levels are usually set out in the section of a contract known as a service level agreement, or SLA, which is also sometimes known as the cloud service agreement (CSA). Think of the SLA like the ground rules for the cloud service – a robust SLA can protect the stability of the cloud service, protect the customer’s access to data and minimise the expense of any required remedial action. And, if the supplier fails to meet the defined level of service, the customer will usually be entitled to some form of remedy, such as a service credit.
A fit for purpose SLA should contain the following three key criteria:
- Availability – uptime
- Data access
- Performance – response and fix times
While not always workable, a business customer should seek to customise the SLA or to negotiate the inclusion of additional provisions. As the market for cloud services becomes more competitive, it is common to see suppliers being more flexible when it comes to agreeing to bespoke SLAs.
1. Availability – uptime
From a commercial viewpoint, at the core of a cloud computing service contract is the customer’s right to access and use the service ‘on demand’. Given the nature of technology there may, however, be circumstances where the service becomes unavailable, which is sometimes referred to as ‘downtime’. Accordingly, the SLA should directly address the levels of availability or ‘uptime’ that the service provider is proposing to offer.
SLAs usually state the availability of the service to the customer in percentage terms eg 99.5% uptime. The manner in which the service availability percentage is calculated requires close attention from the customer. For example, an availability service level measured over a month compared to one measured over a year can have a significant impact on the calculation of service levels and payment of any service credits.
As cloud services becomes more complex and interconnected, when procuring a bundle of services, a customer may want to e