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Table of contents
1.
Introduction
2.
What is SLA (Service Level Agreement)?
3.
Types of Service Level Agreements
3.1.
1. Customer-Based SLA
3.2.
2. Service-Based SLA
3.3.
3. Multi-Level SLA
4.
Common Elements of a Service Level Agreement
4.1.
1. Service Description
4.2.
2. Service Level Objectives (SLOs)
4.3.
3. Metrics and Measurement
4.4.
4. Roles and Responsibilities
4.5.
5. Service Delivery
4.6.
6. Escalation Procedures
4.7.
7. Performance Reporting
4.8.
8. Change Management
4.9.
9. Service Level Credits and Penalties
4.10.
10. Termination and Renewal
5.
Importance 
6.
Monitoring the Cloud Service Level Agreement's Metrics
7.
Verifying Cloud Service Levels
8.
Advantages of SLA
9.
Disadvantages of SLA
10.
Frequently Asked Questions
10.1.
What is the SLA in cloud computing?
10.2.
SLA full form in cloud computing
10.3.
What are 3 types of SLAs?
10.4.
What are the 5 phases of SLA management?
10.5.
What are the 5 objectives of service level agreement?
11.
Conclusion
Last Updated: Apr 27, 2024
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Service Level Agreement in Cloud Computing

Author Aditya Singh
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Leveraging ChatGPT - GenAI as a Microsoft Data Expert
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Prerita Agarwal
Data Specialist @
23 Jul, 2024 @ 01:30 PM

Introduction

You must want to abandon all your confusion regarding Service Level Management in Cloud Computing if you are here. You have questions like, What is a Service Level Agreement? Is it needed to have an Agreement in Cloud Computing? What are the types of Service Level Agreement? What are the things to be taken care of for the Service Level Agreement?..... and so on.

Service Level Agreement (SLA) in Cloud Computing

Relax and Keep Calm; you will get the answer to your every question regarding Service Level Agreement in Cloud Computing in this article.

So, let’s start with the discussion: 

What is SLA (Service Level Agreement)?

A service-level agreement is an agreement between a service provider and a customer that ensures a minimum level of service is maintained. It provides levels of reliability, availability, and also responsiveness to applications; tells who governs when there is a system interruption; and describes penalties if service levels are not met.

It can span geographies, networks, and systems of cloud infrastructure. Different providers and customers have their own service level agreements. There are mainly four aspects to keep in mind when you make a Service Level Agreement.

  • Efficiency of systems 
  • Speed
  • Volume and quality of work, and
  • Responsiveness

Next, we’ll discuss the importance of the cloud service level agreement: 

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Types of Service Level Agreements

There are generally three types of SLA, which is based on many aspects:

  • Customer-Based SLA
  • Service-Based SLA
  • Multi-Level SLA: (which has further three types):
    • Corporate Level
    • Customer Level
    • Service Level
Types of Service Level Agreements

Let us discuss each one of them: 

1. Customer-Based SLA

This agreement includes the details of all relevant services that a client will be provided while leveraging only a single contract. It contains the details regarding the variety and quality of cloud providers' services. It is used for single customers. Example: Telephonic organisations include voice, message, and data services in a single contact.

2. Service-Based SLA

In a Service-Based agreement, one similar type of service for all its customers as the service is limited to the unchanging standard. It is simple for vendors. Example: In the IT sector, using service level SLA means that the same service is provided to all the end-users signing Service-Based SLA.

3. Multi-Level SLA

This type of agreement is customised according to the need of the customer or company. It allows the user to create an arrangement that contains many conditions under the same deal. Multi-Level is further divided into 3 types:

  1. Corporate Level: This SLA does not need frequent updates as it rarely changes. It involves a brief discussion of all aspects of the agreement and applying it to all the customers using it. 
  2. Customer Level: This agreement discusses the service issues associated with the number of retries allowed and other factors.
  3. Service Level: In this agreement, all aspects attributed to a particular service regarding a customer group are included.

The SLA should also mention the terms when the user's specifications are not fulfilled. A cloud service usually offers a tiered service credit plan that gives users credit based on the difference between SLA specifications and the delivered service level specification, and the actual service level provided.

Common Elements of a Service Level Agreement

1. Service Description

The service description outlines the scope of services provided by the service provider. It includes details such as the nature of the service, service availability, performance metrics, and any service limitations or exclusions.

2. Service Level Objectives (SLOs)

SLOs define the measurable goals and targets for service performance, such as uptime, response time, and resolution time. They specify the expected levels of service quality that the service provider is committed to delivering.

3. Metrics and Measurement

This section identifies the specific metrics used to measure service performance, along with the methods and tools employed for measurement. It includes parameters like availability, reliability, responsiveness, and customer satisfaction.

4. Roles and Responsibilities

Roles and responsibilities delineate the duties and obligations of both the service provider and the customer. It clarifies who is responsible for various aspects of service delivery, support, communication, and issue resolution.

5. Service Delivery

Service delivery outlines the procedures, processes, and timelines for delivering the agreed-upon services. It covers aspects such as service initiation, implementation, ongoing support, maintenance, and termination.

6. Escalation Procedures

Escalation procedures define the steps to be followed in the event of service disruptions, failures, or customer dissatisfaction. It establishes a hierarchical process for escalating issues to higher levels of management or support for resolution.

7. Performance Reporting

Performance reporting outlines the frequency, format, and content of performance reports provided by the service provider to the customer. It includes data on service performance, compliance with SLOs, and any issues or incidents encountered.

8. Change Management

Change management governs the process for implementing changes to the services, systems, or infrastructure covered by the SLA. It includes procedures for requesting, approving, testing, and implementing changes while minimizing risks and disruptions.

9. Service Level Credits and Penalties

Service level credits and penalties define the consequences for failing to meet agreed-upon service levels. It may include provisions for compensating the customer for service downtime or poor performance and penalties for repeated failures.

10. Termination and Renewal

Termination and renewal clauses specify the conditions under which the SLA can be terminated, renewed, or modified. It includes provisions for notice periods, renegotiation of terms, and the resolution of disputes or disagreements.

Importance 

  • Service level agreements are essential as more companies depend on different external providers for their applications, systems, and data. 
  • An SLA makes sure that cloud providers meet the requirement of enterprise-level and give customers a defined set of deliverables.
  • A cloud agreement is the same as any other contract. It's the blueprint that governs the relationship between the customer and the service provider. They both agree upon some rules to create a trusted bond between them. 
  • It also reflects the provider's quality of service and its infrastructure.

Monitoring the Cloud Service Level Agreement's Metrics

Most providers provide details of service levels that a user can think of or expect, and their attributes are identical for all users. But when an enterprise selects a service, it may be able to make a more customised deal. For example, the cloud SLA for cloud storage devices may involve particular specifications for retention policies, copies to retain, and storage locations.

Cloud SLA should use security and encryption practices to protect data privacy and data. It should also use data location data recovery expectations and agree on some rules and portability rules used for writing SLA. It is understandable to read terms and conditions. Providers should also specify and be exempt from any downtimes because of scheduled maintenance.

Verifying Cloud Service Levels

Customers can monitor service metrics such as performance, security, etc., through a cloud-native portal. Another thing is that we can use third-party software to track the performance of cloud services.
Providers must use simple language for writing SLA so that it is understandable to read the terms and conditions. Providers should also specify and be exempt from any downtimes because of scheduled maintenance.

Advantages of SLA

  • Clear Expectations: SLAs establish clear expectations between service providers and customers regarding service quality, performance metrics, and responsibilities.
  • Improved Accountability: By defining roles, responsibilities, and performance metrics, SLAs enhance accountability, ensuring that both parties are held accountable for meeting their commitments.
  • Enhanced Communication: SLAs promote regular communication between service providers and customers, fostering transparency, collaboration, and mutual understanding.
  • Effective Problem Resolution: Escalation procedures outlined in SLAs facilitate prompt resolution of issues and disputes, minimizing downtime and disruptions to business operations.
  • Continuous Improvement: SLAs encourage continuous improvement by setting measurable targets and benchmarks for service performance, driving service providers to strive for excellence.

Disadvantages of SLA

  • Rigid Structure: SLAs can be overly rigid, limiting flexibility and adaptability to changing business needs, technological advancements, or unforeseen circumstances.
  • Complexity: Developing and managing SLAs can be complex and time-consuming, requiring detailed negotiation, documentation, and monitoring.
  • Dependency on Metrics: SLAs heavily rely on metrics and measurements to evaluate service performance, which may not always accurately reflect the quality of service or customer satisfaction.
  • Risk of Disputes: Discrepancies in interpreting SLA terms or measuring performance metrics can lead to disputes between service providers and customers, potentially damaging relationships.
  • Costly Enforcement: Enforcing SLA terms, especially penalties or service credits for non-compliance, can be costly and resource-intensive for both parties involved.

Frequently Asked Questions

What is the SLA in cloud computing?

In cloud computing, SLA (Service Level Agreement) defines the terms and conditions of the service provided by the cloud provider to the customer. It specifies service quality, availability, performance guarantees, and support levels.

SLA full form in cloud computing

SLA stands for Service Level Agreement in cloud computing. It outlines the terms and conditions of the service provided by the cloud provider to the customer, including service quality, availability, performance, and support levels.

What are 3 types of SLAs?

The three types of SLAs in cloud computing are:

  1. Customer-based SLA: Tailored to the specific needs and requirements of individual customers.
  2. Service-based SLA: Applies to all customers using a particular service or resource offered by the cloud provider.
  3. Multi-level SLA: Combines elements of both customer-based and service-based SLAs, accommodating different levels of service for various customer segments.

What are the 5 phases of SLA management?

The five phases of SLA management are:

  1. Initiation: Identifying stakeholders, defining objectives, and establishing the scope of the SLA.
  2. Negotiation: Negotiating terms, conditions, and performance metrics between the service provider and the customer.
  3. Implementation: Deploying tools, processes, and systems to monitor, measure, and manage SLA compliance.
  4. Monitoring: Continuously monitoring service performance, collecting data, and analyzing metrics against predefined targets.
  5. Review and Improvement: Reviewing SLA performance, identifying areas for improvement, and making necessary adjustments to optimize service delivery.

What are the 5 objectives of service level agreement?

The five objectives of a Service Level Agreement (SLA) are:

  1. Defining Services: Clearly defining the scope, nature, and quality of services provided by the service provider.
  2. Setting Expectations: Establishing clear expectations and standards for service performance and availability.
  3. Ensuring Accountability: Holding both parties accountable for meeting their respective obligations and responsibilities.
  4. Facilitating Communication: Promoting regular communication and collaboration between the service provider and the customer.
  5. Driving Continuous Improvement: Encouraging continuous improvement by setting measurable targets and benchmarks for service quality and performance.

Conclusion

In this article, we discussed the Service Level Agreement. Need of SLA. Different types of SLA. Essential points for drafting an SLA in cloud computing.

We hope that blog has helped you enhance your knowledge regarding Service Level Agreement in Cloud. Please check out these articles to improve your understanding:  Introduction to Cloud ComputingIaaS vs SaaS vs PaaS.

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