Service-level agreement (SLA) is an agreement made between a service provider and a customer that specifies the service the provider will furnish and the service standards. It is a contract between two commercial parties, which provide the terms and conditions about services, such as duration, quality, and financial compensation. An SLA provides a commercial assurance that the service provider will meet the agreed criteria of performance.
SLAs are commonly used in the IT sector to ensure that a service provider, including an internet service provider (ISP), cloud provider, or managed services provider (MSP), delivers the expected levels of service. In addition, they are typically used for software-as-a-service (SaaS).
Typically, SLAs are organized in a hierarchical structure that includes the customer’s service level objectives, service-level objectives, service-level targets, and service-level commitments. Service-level objectives define the overall goals of the agreement and include items such as availability, reliability, throughput, latency, and warranty. Service-level targets define the measurable goals, while service-level commitments are the specific measures and services that must be met in order to fulfill the SLA.
In addition to outlining the service provider’s obligations, an SLA also outlines the service customer’s obligations. These obligations may include such items as responding to service incidents in a timely manner, providing feedback on the service, and utilizing certain tools, such as monitoring software.
SLAs are often created as part of a service agreement, although they may be used independently as well. They are designed to ensure that the customer receives the services promised and to ensure that the service provider meets the expectations of the customer. By its very nature, an SLA also serves to set expectations for both parties’ future service levels.
