Service level agreements-deal-makers or deal-breakers?

The days of a handshake and a promise are over for ISPs

Until recently, ISP customers rarely noticed performance problems because being on the Internet was so exciting. Unfortunately, those days are over. A new breed of technically savvy and exacting customers is demanding a higher performance level. Their bargaining chip is a service-level agreement. Customers from across the board-enterprise and consumer-are now seeking SLAs in all areas of network performance.

According to a study by Infonetics Research, 85% of national ISPs offer some type of SLA, including Sprint, MCI WorldCom, UUNet, GTE and PSINet. The typical SLA includes dedicated Web-site access and network backbone availability, according to the study. The most common guarantee made by ISPs is 99.7% Web-site uptime.

In this new era of bargaining, an SLA is one more opportunity for ISPs to offer a value-added service. Improved, guaranteed performance costs more, and customers-especially Fortune 1000 companies-are willing to pay for it. Virtual private networks, voice over IP and electronic commerce services are some of the new areas where SLAs are gaining a foothold.

Previously, ISPs had difficulty measuring their performance. In some cases, if a customer made two complaints in one month, the ISP automatically refunded the monthly service cost. "Since there aren't a lot of tools that provide reporting, ISPs have been over-provisioning to live up to their performance agreements," said Greg Howard, an analyst with Infonetics Research.

Rather than over-provisioning, InterAccess, a Chicago-based ISP, is using Hewlett-Packard Co.'s Firehunter to monitor service-level performance for its 20,000 customers and 2000 corporate Web sites. HP's Firehunter series is a family of scalable products that consists of a diagnostic management server and measurement agents that reside on the various servers, routers and switches on an ISP's network.

The agents gather data on the different network components and relay it to the diagnostic management server. The server composes the data and provides a number of different reports.

In terms of SLAs, Firehunter/Pro can keep ISPs out of the penalty box. When the service dips below the performance threshold, it will generate alarms to the network operators. "It's proactive rather than reactive, if they violate the SLA," said John Smith, marketing manager for HP's Internet Services Management business.

InterAccess uses Firehunter to monitor all its Internet servers and e-mail. The ISP's high-end customers can access performance data, which is updated daily, via the Web. The ISP also publishes quarterly performance report cards for all its customers. Information about response time, number of connections and Web site availability is included in the reports.

"We've always tried to differentiate ourselves from other ISPs by our service and performance. We've found that customers are much more forgiving when we show that we're on top of a problem," said Hoyt Hudson, InterAccess' vice president of information systems.

Although InterAccess has found providing report cards to customers is a boon for its business, the vast majority of ISPs in Infonetics' study said they would not give customers the tools to check their performance. InterAccess considers the report an addition to its services package. "We're always trying to improve our performance or lower our prices. Now we can give them more for their connection cost," said Hoyt.

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