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What to Look For in a Cloud Service-Level Agreement

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What to Look For in a Cloud Service-Level Agreement

June 23, 2014
By Lavanya Rathnam
TMCnet Contributing Writer

A cloud service-level agreement (SLA) is a service contract between the cloud service buyer and the provider, where the terms of the service are defined. However, in the cloud industry, these agreements tend to be vague because it is a relatively young industry, so there could be a fall back on guarantees, according to Charles Babbock of

While these fall backs are unfair to buyers, it stems from a certain measure of ignorance on the part of buyers, too. To avoid such issues, it is a good idea to look for certain aspects in every SLA. First, it is important to know how uptimes are calculated. AWS, for example, takes into account a period of 12 months before the client has signed up for the service, and under the assumption that there was 100 percent uptime during those 12 months. Therefore, if a customer experiences an outage for one hour on the first day of service, then the uptime would still be 99.99 percent.

Another important question is to know the consequence for dipping below the SLA. While some companies like AWS offer a repayment credit, it is not always fair because if the downtime was during the busy holiday season, then the business would have lost more. Therefore, a reasonable compensation should be negotiated at the time of signing the contract.

Data security is another key aspect of SLAs. Before signing the contract, it is important for buyers to know where their data will be stored, and how will the cloud service provider ensure that it is safe. The answer to this question is pertinent because the business stands to lose heavily when there is a security breach.

While these are the three most important questions, businesses can also request more information about cost, performance degradation, and any other part of the agreement that is ambiguous or manipulative. 

Edited by Rory J. Thompson

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