What is a service level agreement?

An SLA or service-level agreement is a commitment between a service provider and a client. Particular aspects of the service – quality, availability, responsibilities – are agreed between the service provider and their customers.

SLA’s are important for both service providers and their customers. Service providers need SLAs to help them manage customer expectations and define the severity levels and circumstances under which they are not liable for outages or performance issues. Customers can also benefit from SLAs because the contract describes the performance characteristics of the service — which can be compared with other vendors’ SLAs — and sets forth the means for redressing service issues.

There are three basic types of SLAs: customer, service and multilevel service-level agreements:

  • A customer based SLA is a type of contract designed for individual customers and comprises all relevant services that a client may need, while leveraging only one contract. It contains details regarding the type and quality of service that has been agreed upon.
  • A service based SLA is a type of contract designed for one identical type of service for all of its customers. Because the service is limited to one unchanging standard, it is more straightforward and convenient for vendors.
  • A multilevel service-level agreement is a type of contract that is customised for a customer to address contracts at the corporate, customer and service levels.

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