Service level agreement
Also known as: SLA
A service level agreement (SLA) is an agreement between supplier and customer regarding the availability and support of a product or service. SLAs are really only found in business-to-business service provision. An SLA gives the customer assurance about the usability of a product or service.
An example of an industry where service level agreements are widely used is business web hosting. A company that rents a web server will be very concerned that this server performs well and is optimally accessible. In an SLA, the supplier specifies how the server is maintained (think of updates), what percentage of the time it is at least accessible (often 99.9%) and when (business hours or 24/7) and in what way (phone/email) the customer is entitled to support.
A generally fixed monthly fee is charged for the certainty provided by the SLA and what the supplier must do in return. Planned and unplanned work that falls within the SLA is not subject to additional charges. If support is requested that falls outside the SLA, for example because of the time of day, additional charges may apply.
When a supplier fails to meet the terms of the SLA, such as in the example of a Web server being unreachable for too long in one month, the customer is entitled to financial compensation. Usually this is a (partial) refund of the subscription costs, but there may also be compensation.
