Evaluating a new cloud application for your company? Before you sign anything, make sure to review the vendor’s SLA, Service Level Agreement, for all the essential components. In our latest and greatest eBook, “The Five Key Elements of a Reputable Cloud SLA”, we highlight the 5 key elements of a reputable cloud SLA to assist you in your evaluation process. The report outlines the critical SLA components to look for when assessing cloud apps for your business.  

A cloud application Service Level Agreement (SLA) is, at its core, a formal method of setting expectations between a vendor and a customer. No service is perfect, and SLAs spell out exactly how a vendor will plan for and respond to interruptions in cloud application access or downgrades in cloud service performance. Below is one of the critical components you should look for in a cloud SLA. For all 5 components, grab the free ebook here.

Service Credits

Virtually every cloud application service provider uses service credits as the primary method of compensation under a SLA. A service credit is free use of the cloud service for a certain period of time. Typically, service credits are measured in days of service, such that particular violations of the SLA earn you a certain number of days to use the cloud service free of charge.

When examining a cloud SLA, pay close attention to the definition of a service credit so you can evaluate competing cloud offers side-by-side. If Vendor A defines a service credit as “one day of service” and Vendor B defines a service credit as “1/30th of a monthly subscription charge”, you may need to do some quick math to determine the relative dollar values of these credits.

Along with the definition of a service credit, an SLA should explicitly describe the uptime thresholds that entitle you to receive one or more credits. Does a monthly uptime of 99.8% get you one service credit, or three? At what uptime measure do you get additional service credits: 99.5%, 99% or 90%? The SLA should make that clear.

The SLA will likely include a cap on service credits available within any given measurement period, usually around half of your total possible subscription charge. For example, a company that has a monthly uptime guarantee will likely cap your service credits at 15 days per month, or half what you would pay for a month of service. It’s rare for any SLA to go above a 50% compensation level.

Finally, the Service Level Agreement should define the process for requesting a service credit. Unless a cloud service suffers a massive, public outage, it’s unusual for a vendor to automatically grant a service credit in response to an SLA violation. You’re going to have to ask for service credits, and the SLA should tell you how. In particular, the SLA should spell out the acceptable methods for invoking service credits, as well as the acceptable window of time for making a request.

Want more cloud SLA evaluation tips? Download the free ebook below.