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Service Level Agreements helps to define the relationship between the customer and the organization. Service Level Agreements is the cornerstone of the service provider to set and maintain commitments to the service consumer. Service Level Agreements addresses five key aspects: What the provider is promising. How the provider will deliver on those promises. Who will measure delivery, and how. How the SLA will change over time. Service Level Agreements, realistic and measurable commitments are important for performing promised but swift and well communicated resolution of issues is even more important. The challenge for a new service and its associated SLA is that there is a direct relationship between the architecture and what the maximum levels of availability are.

Service Level Agreements must be defined with the infrastructure in mind. An exponential relationship exists between the levels of availability and the cost. The Service Level Agreements shows all the important components one wants to address in a document. Service Level Agreements can be reviewed every six months and updated as necessary. When updates are necessary, the customer will be asked to review and approve the changes. Other areas that must be defined in an Service Level Agreements details on how the measurements are done, what usage limitation the service has with regard to number of concurrent users and so forth, and details on how and who receives reports and how conflicts are arbitrated. Because these topics are unique in each contract, they are not included in the preceding example.

The main reason for this difference is that internal Service Level Agreements are driven by budget constraints and the business management’s view of IT, while external Service Level Agreements are driven by revenue, cost and earnings. A good Service Level Agreements is important because it sets boundaries and expectations for the following aspects of data center service provisioning. Clearly defined promises reduce the chances of disappointing a customer. These promises also help to stay focused on customer requirements and assure that the internal processes follow the right direction. Service Level Agreements drives internal processes by setting a clear, measurable standard of performance. Consequently, internal objectives become clearer and easier to measure. It makes the relationship clear and positive.

An SLA is a great vehicle to communicate the expectations and create a level of trust by adding conditions and penalties when the promises are not met. The SLA defines a clear relationship between the customer and the provider by setting boundaries, conditions, penalties and expectations. Because an SLA links the customer requirements to infrastructure requirements, it creates the ability to link service levels to service cost and, as a result, profitable pricing can be set. Moreover, by spending wisely on well defined requirements rather than rules of thumb or gut feeling, more efficient cost management can be achieved. The capability to service offerings with different pricing for different service levels benefits both the vendor and the customer.

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