Public, private, hybrid; SaaS, IaaS, PaaS, RaaS and much more. For growing businesses looking to ascend to the cloud, it may seem like you need a team to understand the acronyms that go with the property. Well, we are here to introduce the most important acronym in your cloud computing decision—The Service-Level Agreement or SLA. What is a cloud SLA and what do you need to know to protect your business?
What is a Cloud Service-Level Agreement?
To understand what a cloud SLA is and what it includes, you need to understand the underlying idea of the service-level agreement. CIO Magazine defines an SLA as the following:
“A service-level agreement (SLA) is simply a document describing the level of service expected by a customer from a supplier, laying out the metrics by which that service is measured, and the remedies or penalties, if any, should the agreed-upon levels not be achieved. Usually, SLAs are between companies and external suppliers, but they may also be between two departments within a company.”
This is helpful, but in the cloud, there are many other things you should seek in an SLA. Since much of the relationship between an institution and a cloud computing provider will be contractually governed, it is important for the contract to include service level agreements (SLAs) stating specific parameters and minimum levels for each element of the service provided. The SLAs must be enforceable and state specific remedies that apply when they are not met. Specifically, four key areas to consider in your SLA are as follows.
- Operational Risk
- Business Risk
- Penalties, Rewards, and Transparency
Control: Availability, Reliability, Performance
The service level agreement must guarantee the quality and performance of operational functions like availability, reliability, performance, maintenance, backup, disaster recovery, etc that used to be under the control of the in-house IT function when the applications were running on-premises and managed by internal IT, but are now under the vendor’s control since the applications are running in the cloud and managed by the vendor.
The service level agreement should also address perceived risks around security, privacy and data ownership – I say perceived because most SaaS vendors are actually far better at these things than nearly all of their clients are. Guaranteed commitments to undergoing regular SAS70 Type II/SSAE 16 audits and external security evaluations are also important parts of mitigating operational risk.
As cloud computing companies become more comfortable with their ability to deliver value and success, more of them will start to include business success guarantees in the SLA – such as guarantees around successful and timely implementations, the quality of technical support, business value received and even to money back guarantees – if a client isn’t satisfied, they get their money back.
Cloud/SaaS vendor can rationally consider offering business risk guarantees because their track record of successful implementations is typically vastly higher than their enterprise software counterparts.
Penalties, Rewards, Transparency
The service level agreement must have real financial penalties / teeth when an SLA violation occurs. If there isn’t any pain for the vendor when they fail to meet their SLA, the SLA doesn’t mean anything.
Transparency is also important – the vendor should also maintain a public website with continuous updates as to how the vendor is performing against their SLA, and should publish their SLA and their privacy policies. The best cloud vendors realize that their excellence in operations and their SLAs are real selling points, so they aren’t afraid to open their kimonos in public.
Protect Your Business: Carefully Read Your SLA
Before signing up for any cloud provider, one of the most important things to consider is how your agreement will affect the data, your company, and the provider. This should be a major decision that you need to discuss with your team, your IT experts, and possibly a lawyer. It’s much more than “I agree to the Terms and Conditions.”
The secret sauce behind all of this is that cloud vendors can do all of these things much more cheaply and a lot better than nearly all of their clients can, because can spread the cost of doing all of this well across thousands of clients. The best cloud vendors have figured out that this is both a huge competitive advantage and that it drives significantly value to their clients.
One of the best Service-Level Agreements in the business is that of Intacct. Titled the “Buy with Confidence” guarantee, this SLA is published for all prospective buyers (And even cloud companies looking to benchmark) on their website. It includes the necessary guarantees, and even offers the real time system status and uptime (which at this point is 99.983% over the past 12 months).
InCloud360 is a proud supplier of Intacct Cloud Financial Management Software. We welcome you to learn more about the Buy with Confidence Guarantee and see how you can get even more from the software by working with a value-added reseller like InCloud360, who will provide training and support for Intacct users.
Ready to learn more? Contact InCloud360 to see what you can get when you ‘Go All In’ with InCloud360.