Service level agreement (SLA)
A service level agreement is a written contract that sets the performance a supplier must deliver, how that performance is measured, and what happens if the standard isn't met.
A service level agreement is the written part of a supplier contract that turns a service promise into something you can measure. It names the service, the standard, how performance is reported, and what happens if they miss. Typical measures include availability, time to acknowledge a fault, and time to restore the service. On a monthly retainer, those commitments sit in the ongoing relationship.
The SLA is how you hold a provider to account without living in a ticket queue. You agree what working looks like for email, internet and cloud systems. The supplier monitors those services around the clock and reports whether the month met the standard. A four-hour response commitment means a qualified engineer starts work within four hours of a priority incident. It doesn't mean the fault is fixed by then. Service credits or a formal review usually follow a miss.
SLAs go wrong when the headline figure looks strong and the exclusions do the work. Availability counted only during office hours, a response that is an auto-reply, or planned maintenance written out of the calculation can leave you with a 99.9% result and a disrupted week. Another gap is measuring the circuit but not the office network, or the helpdesk but not the systems it depends on. Read the definitions, the exclusions and the reporting method before you sign.
When it matters
- →Buying managed IT, connectivity or a hosted service on a retainer.
- →An outage would stop client work, bookings or payments.
- →Two suppliers quote the same uptime figure with different exclusions.
- →Last year's incidents produced no credits and no clear report.
Related terms
Service level agreement (SLA): common questions
What should a service level agreement include?
A useful SLA names the services covered, the hours they are supported, the target for each measure, how those measures are calculated, and what is excluded. It should also say how you receive reports and what follows a miss, such as service credits or a review meeting. Ask for definitions of availability, response and restore. If a target is left as reasonable endeavours, you don't have a measurable commitment.
What happens if a supplier misses an SLA?
Most SLAs offer service credits, a reduction on the following month's fee, rather than cash for lost business. Repeated misses may trigger a service review or a right to end the contract. Credits are usually modest, so they won't cover the operational cost of an outage. You should still receive a report that states the cause and the change being made so the same fault is less likely to recur.
What does 99.9% availability mean in an SLA?
A 99.9% monthly SLA allows about 43 minutes of downtime in a 30-day month. The same figure measured across a year allows several hours. The number only holds if you know the measurement window, what counts as an outage, and whether planned maintenance is excluded. A calculation that runs only during office hours is easier to hit and less useful to you. Ask how incidents are logged against the percentage.
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