Research: SLAs

Jun 06, 2011


Promises, Promises: A Not -So-New SLA Model

Every day, our lives are affected by the services we use. From accessing email to making calls on our iPhones, we expect a certain level of availability and quality. Underlying that expectation is a chain of promises that begins with a provider delivering (or not) a well-defined service to an organization, which then builds on to that service until finally an employee or customer is provided with something—maybe a dial tone, or a message that a reimbursement check was lost. A lot can go wrong between the time an ISP provisions a T1 to when Joe in accounting gets the note that a payment needs to be reissued.

Companies have long used service-level agreements to make sure they’re getting their money’s worth. But as many IT functions move to the cloud, are external SLAs still relevant? Are there better ways to make sure our companies get what we’re paying for? To find out how external SLAs are being defined, managed, monitored, acted on and fought over, InformationWeek Analytics crafted a survey that we opened to both providers of IT services and those writing the checks. Of 562 business technology professionals responding, 360 are consumers; companies with 10,000 or more employees are the top demographic represented, at 28%. We got an earful about the impact that SLAs have on service quality today, with a focus on how these agreements are being treated in cloud computing environments.

“I believe large-scale IT customers define too many SLA reports,” says a project manager from a large service provider. “Some of our customers require over 200 SLA reports. I think once you get into that realm, you’re looking at the law of diminishing returns. It creates a waste of money on both sides.” A VP and COO from another large service provider adds that SLAs, in the traditional server- or application-availability sense, don’t tell us much about how we’re meeting our users’ needs. “We have moved to business-critical events that mean something,” he says.

And, of course, cloud providers have their own perspective.

Sure, we’d all like to return to an idyllic (and, let’s face it, mythical) time when a handshake sealed a promise between vendor and consumer. But the reality is, it’s human nature to cut corners in an effort to increase the bottom line. Few providers are above sacrificing service quality where they think they can get away with it. If that weren’t the case, we wouldn’t need SLAs. “SLAs are written to protect the guilty, not encourage great service,” says one respondent. It doesn’t need to be that way. The goal for today’s IT service environments is a “trust but verify” philosophy, with SLAs the bedrock of that verification. In this report, we’ll analyze our survey responses and discuss how IT can develop effective SLAs. We’ll explain how monitoring tools are used within a cloud environment and discuss ways to discover and take action on violations. (R2450611)

Survey Name: InformationWeek Analytics 2011 SLA Survey
Survey Date: February 2011
Region: North America
Number of Respondents: 562 business technology professionals consuming and providing services covered by SLAs


Research Report