Degrees of certainty

Providers use SLAs as glorified sales tactics, 
service differentiators--and sometimes both

Service level agreements are like warranties. Without them, Murphy's Law is sure to apply what can go wrong, will go wrong.

Yet despite their insistence on SLAs, application service providers (ASPs) are more interested in what can go right. ASPs look to hosting service providers such as Sprint, Verio and TeleComputing to provide a consistent level of performance more than they look for a rebate check for poor service.

“Every customer hopes they never have to ask for a credit,” said Sean Chavin, group manager of IP backbone services at Sprint E|Solutions. “They want their network to be available 100% of the time.”

SLAs provide service guarantees and reciprocation if those guarantees are not met. But what kind of performance metrics do hosting providers offer, and how are services gauged to ensure SLAs are honored? It appears to be different for everyone.

Sprint currently offers what the company calls “the four horsemen” of IP backbone SLAs (see box). The provider recently announced a guaranteed packet loss of no more than 0.3% and a 100% guarantee on power uptime.

Sprint offers these four SLAs in addition to other agreements geared toward installation, upgrades or other areas that are driven into the customer contract at E|Solutions, said Chris Clark, vice president of IP product management for global SprintLink, the backbone services division of Sprint.

The four horsemen Primary SLAs provided to Sprint E|Solutions customers Power SLA: Offers 100% power availability for Internet customers Packet Loss SLA: Pledges packet loss rate of no more than 0.3% for Internet customers Delay SLA: Promises no more than 70 milliseconds round trip across SprintLink network Availability SLA: 100% availability for enhanced metropolitan area network access customers; 99.9% availability for MAN or traditional access customers Source: Sprint

In contrast, TeleComputing's typical SLA offers about 99.7% availability, an improvement of 0.2% from a year ago, said Alexander Hawkinson, senior vice president and general manager of the U.S. for the company.

Although TeleComputing is working to build stronger SLAs, it knows its ASP customers typically focus on the availability of actual business application as opposed to any of the underlying infrastructure, Hawkinson said. “A lot of service providers have treated SLAs as more of a marketing push than an actual interactional agreement,” he said.

Verio, a wholly owned subsidiary of NTT Communications, also is improving its SLAs. “Verio is currently evaluating and upgrading its Network SLAs for domestic customers to support their growing business demands,” a Verio spokeswoman said. In conjunction with NTT, the ISP also is in the process of developing a global SLA.

But SLAs have their limitations, according to SecureLease, an ASP specializing in the leasing and finance industries.

“It doesn't matter if Sprint refunds a month of my bill or 24 months of my bill,” said Kirk Hall, chief technology officer for SecureLease, which signed with Sprint in June to use its E|Solutions Internet Center in Kansas City. “If they go down for a three days, or worse yet, if they do something that exposes me to damage, it's nothing I can recover from, which is money.”

SecureLease chose Sprint primarily for the carrier's expert staff, Hall said. “If we don't work, our customers are unhappy with us. We use and depend on Sprint, like our customers depend on us.”

Sprint's SLAs currently are not automatically tied into the billing system, but the carrier does have a process in place in which customers are given a three-day credit for a service violation, Chavin said. Customers also have the option of viewing statistics on Sprint's Web site to see if SLAs have been met.

Sprint also plans on releasing a proactive network management capability, which the carrier and its E|Solutions network will use to notify customers of network performance, Clark said.

SLAs are important to the selling process and help providers focus on service, said Carrie Lewis, e-sourcing strategies analyst for The Yankee Group.

“Until now, it's been up to the end user to ensure that they're getting the services they contracted to receive,” she said. “As we move forward, [providers] are going to take more responsibility for that by implementing technologies that provide actual reporting to the end user that their SLA is being met.