Service-level agreement

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A service-level agreement (SLA) is part of a standardized service contract where a service is formally defined. Particular aspects of the service – scope, quality, responsibilities – are agreed between the service provider and the service user.[1] A common feature of an SLA is a contracted delivery time (of the service or performance). As an example, Internet service providers and telcos will commonly include service level agreements within the terms of their contracts with customers to define the level(s) of service being sold in plain language terms. In this case the SLA will typically have a technical definition in terms of mean time between failures (MTBF), mean time to repair or mean time to recovery (MTTR); identifying which party is responsible for reporting faults or paying fees; responsibility for various data rates; throughput; jitter; or similar measurable details.


A service-level agreement is an agreement between two or more parties, where one is the customer and the others are service providers. This can be a legally binding formal or an informal "contract" (for example, internal department relationships). The agreement may involve separate organizations, or different teams within one organization. Contracts between the service provider and other third parties are often (incorrectly) called SLAs – because the level of service has been set by the (principal) customer, there can be no "agreement" between third parties; these agreements are simply "contracts." Operational-level agreements or OLAs, however, may be used by internal groups to support SLAs. If some aspect of a service has not been agreed with the customer, it is not an "SLA".

SLAs commonly include many components, from a definition of services to the termination of agreement.[2] To ensure that SLAs are consistently met, these agreements are often designed with specific lines of demarcation and the parties involved are required to meet regularly to create an open forum for communication. Contract enforcement (rewards and penalties) should be rigidly enforced, but most SLAs also leave room for annual revisitation so that it is possible to make changes based on new information.[3]

SLAs have been used since late 1980s by fixed line telecom operators as part of their contracts with their corporate customers. This practice has spread such that now it is common for a customer to engage a service provider by including a service level agreement in a wide range of service contracts in practically all industries and markets. Internal departments (such as IT, HR, and real estate) in larger organizations have adopted the idea of using service-level agreements with their "internal" customers — users in other departments within the same organization. One benefit of this can be to enable the quality of service to be benchmarked with that agreed across multiple locations or between different business units. This internal benchmarking can also be used to market test and provide a value comparison between an in-house department and an external service provider.

SLAs are, by their nature, "output" based – the result of the service as received by the customer is the subject of the "agreement." The (expert) service provider can demonstrate their value by organizing themselves with ingenuity, capability, and knowledge to deliver the service required, perhaps in an innovative way. Organizations can also specify the way the service is to be delivered, through a specification (a service level specification) and using subordinate "objectives" other than those related to the level of service. This type of agreement is known as an "input" SLA. This latter type of requirement is becoming obsolete as organizations become more demanding and shift the delivery methodology risk on to the service provider.

Service level agreements are also defined at different levels:

  • Customer-based SLA: An agreement with an individual customer group, covering all the services they use. For example, an SLA between a supplier (IT service provider) and the finance department of a large organization for the services such as finance system, payroll system, billing system, procurement/purchase system, etc.
  • Service-based SLA: An agreement for all customers using the services being delivered by the service provider. For example:
    • A car service station offers a routine service to all the customers and offers certain maintenance as a part of offer with the universal charging.
    • A mobile service provider offers a routine service to all the customers and offers certain maintenance as a part of offer with the universal charging
    • An email system for the entire organization. There are chances of difficulties arising in this type of SLA as level of the services being offered may vary for different customers (for example, head office staff may use high-speed LAN connections while local offices may have to use a lower speed leased line).
  • Multilevel SLA: The SLA is split into the different levels, each addressing different set of customers for the same services, in the same SLA.
    • Corporate-level SLA: Covering all the generic service level management (often abbreviated as SLM) issues appropriate to every customer throughout the organization. These issues are likely to be less volatile and so updates (SLA reviews) are less frequently required.
    • Customer-level SLA: covering all SLM issues relevant to the particular customer group, regardless of the services being used.
    • Service-level SLA: covering all SLM issue relevant to the specific services, in relation to this specific customer group.

Common metrics[edit]

Service level agreements can contain numerous service performance metrics with corresponding service level objectives. A common case in IT service management is a call center or service desk. Metrics commonly agreed to in these cases include:

  • Abandonment Rate: Percentage of calls abandoned while waiting to be answered.
  • ASA (Average Speed to Answer): Average time (usually in seconds) it takes for a call to be answered by the service desk.
  • TSF (Time Service Factor): Percentage of calls answered within a definite timeframe, e.g., 80% in 20 seconds.
  • FCR (First-Call Resolution): Percentage of incoming calls that can be resolved without the use of a callback or without having the caller call back the helpdesk to finish resolving the case.
  • TAT (Turn-Around Time): Time taken to complete a certain task.
  • MTTR (Mean Time To Recover): Time taken to recover after an outage of service.

Uptime is also a common metric, often used for data services such as shared hosting, virtual private servers and dedicated servers. Common agreements include percentage of network uptime, power uptime, number of scheduled maintenance windows, etc.

Many SLAs track to the Information Technology Infrastructure Library specifications when applied to IT services.

Specific example[edit]

Backbone Internet providers[edit]

It is not uncommon for an internet backbone service provider (or network service provider) to explicitly state its own SLA on its website.[4][5][6] The U.S. Telecommunications Act of 1996 does not expressly mandate that companies have SLAs, but it does provide a framework for firms to do so in Sections 251 and 252.[7] Section 252(c)(1) for example (“Duty to Negotiate”) requires Incumbent local exchange carriers (ILECs) to negotiate in good faith about matters such as resale and access to rights of way.


A web service level agreement (WSLA) is a standard for service level agreement compliance monitoring of web services. It allows authors to specify the performance metrics associated with a web service application, desired performance targets, and actions that should be performed when performance is not met.

WSLA Language Specification, version 1.0 was published by IBM on January 28, 2001.

Cloud computing[edit]

The underlying benefit of cloud computing is shared resources, which is supported by the underlying nature of a shared infrastructure environment. Thus, SLAs span across the cloud and are offered by service providers as a service-based agreement rather than a customer-based agreement. Measuring, monitoring and reporting on cloud performance is based on the end UX or their ability to consume resources. The downside of cloud computing relative to SLAs is the difficulty in determining the root cause of service interruptions due to the complex nature of the environment.

As applications are moved from dedicated hardware into the cloud, they need to achieve the same or even more demanding levels of service than classical installations. SLAs for cloud services focus on characteristics of the data center and more recently include characteristics of the network (see carrier cloud) to support end-to-end SLAs.[8]

Any SLA management strategy considers two well-differentiated phases: negotiating the contract and monitoring its fulfilment in real time. Thus, SLA management encompasses the SLA contract definition: the basic schema with the QoS (quality of service) parameters; SLA negotiation; SLA monitoring; SLA violation detection; and SLA enforcement—according to defined policies.[9]

The main point is to build a new layer upon the grid, cloud, or SOA middleware able to create a negotiation mechanism between the providers and consumers of services. An example is the EU–funded Framework 7 research project, SLA@SOI,[10] which is researching aspects of multi-level, multi-provider SLAs within service-oriented infrastructure and cloud computing, while another EU-funded project, VISION Cloud,[11] has provided results with respect to content-oriented SLAs.

FP7 IRMOS also investigated aspects of translating application-level SLA terms to resource-based attributes in an effort to bridge the gap between client-side expectations and cloud-provider resource-management mechanisms.[12][13][14] A summary of the results of various research projects in the area of SLAs (ranging from specifications to monitoring, management and enforcement) has been provided by the European Commission.[15]


Outsourcing involves the transfer of responsibility from an organization to a supplier. This new arrangement is managed through a contract that may include one or more SLAs. The contract may involve financial penalties and the right to terminate if any of the SLAs metrics are consistently missed. Setting, tracking and managing SLAs is an important part of the outsourcing relationship management (ORM) discipline. Specific SLAs are typically negotiated up front as part of the outsourcing contract and used as one of the primary tools of outsourcing governance.

In software development, specific SLAs can apply to application outsourcing contracts in line with standards in software quality, as well as recommendations provided by neutral organizations like CISQ, which has published numerous papers on the topic (such as Using Software Measurement in SLAs[16]) that are available to the public.

See also[edit]


  1. ^ Kearney, K.T.; Torelli, F. (2011). "The SLA Model". In Wieder, P.; Butler, J.M.; Theilmann, W.; Yahyapour, R. Service Level Agreements for Cloud Computing. Springer Science+Business Media, LLC. pp. 43–68. ISBN 9781461416142. 
  2. ^ "The Service Level Agreement Zone". SLA Information Zone. Service Level Agreement Zone. 2015. Retrieved 22 June 2016. 
  3. ^ Shacklett, M.E. (12 January 2011). "Five Key Points for Every SLA". Dell. Archived from the original on 22 December 2012. Retrieved 22 June 2016. 
  4. ^ "Global IP Network SLA". NTT Communications. Retrieved 22 June 2016. 
  5. ^ "Global Latency and Packet Delivery SLA". Verizon. Retrieved 22 June 2016. 
  6. ^ "Business Edition - AT&T U-verse Voice and TV - Terms of Service (TOS) and AT&T Broadband - Service Level Agreement (SLA)". AT&T. Retrieved 22 June 2016. 
  7. ^ Wikisource:Telecommunications Act of 1996#SEC. 101. ESTABLISHMENT OF PART II OF TITLE II.
  8. ^ Rueda, J.L.; Gómez, S.G.; Chimento, A.E. (2011). "The Service Aggregator Use Case Scenario". In Wieder, P.; Butler, J.M.; Theilmann, W.; Yahyapour, R. Service Level Agreements for Cloud Computing. Springer Science+Business Media, LLC. pp. 329–342. ISBN 9781461416142. 
  9. ^ Gallizo, G.; Kuebert, R.; Oberle, K.; Menychtas, A.; Konstanteli, K. (2009). "Service Level Agreements in Virtualised Service Platforms". In Cunningham, P.; Cunningham, M. eChallenges e-2009 Conference Proceedings. IIMC International Information Management Corporation. pp. 1–8. doi:10.13140/2.1.1541.4723. ISBN 9781905824137. 
  10. ^ Butler, J.M.; Yahyapour, R.; Theilmann, W. (2011). "Motivation and Overview". In Wieder, P.; Butler, J.M.; Theilmann, W.; Yahyapour, R. Service Level Agreements for Cloud Computing. Springer Science+Business Media, LLC. pp. 3–12. ISBN 9781461416142. 
  11. ^ Villari, M.; Tusa, F.; Celesti, A.; Puliafito, A. (2012). "How to Federate VISION Cloud through SAML/Shibboleth Authentication". In De Paoli, F.; Pimentel, E.; Zavattaro, G. Service-Oriented and Cloud Computing. Springer-Verlag Berlin Heidelberg. pp. 259–274. ISBN 9783642334276. 
  12. ^ Boniface, M.; Nasser, B.; Papay, J.; et al. (2010). "Platform-as-a-Service Architecture for Real-Time Quality of Service Management in Clouds". ICIW '10: Proceedings of the 2010 Fifth International Conference on Internet and Web Applications and Services: 155–160. doi:10.1109/ICIW.2010.91. 
  13. ^ Kousiouris, G.; Menychtas, A.; Kyriazis, D.; et al. (2014). "Dynamic, behavioral-based estimation of resource provisioning based on high-level application terms in Cloud platforms". Future Generation Computer Systems. 32 (March 2014): 27–40. doi:10.1016/j.future.2012.05.009. 
  14. ^ Cuomo, A.; Di Modica, G.; Distefano, S.; et al. (2013). "An SLA-based Broker for Cloud Infrastructures". Journal of Grid Computing. 11 (March 2013): 1–25. doi:10.1007/s10723-012-9241-4. 
  15. ^ Kyriazis, D., ed. (June 2013). "Cloud Computing Service Level Agreements - Exploitation of Research Results". European Commission. p. 51. Retrieved 22 June 2016. 
  16. ^ Curtis, B.; Herron, D.; Subramanyam, J. (July 2015). "Using Software Measurement in SLAs: Integrating CISQ Size and Structural Quality Measures into Contractual Relationships" (PDF). CISQ. Retrieved 22 June 2016. 

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