Because a network or application snafu can cost an enterprise as much as US$85,000 per hour, corporate customers tend to perk up when vendors start offering hard numbers to back up service pledges.
Most recently it was WorldCom Inc.’s UUNET Technologies Inc. and Qwest Cyber.Solutions LLC (QCS) rushing forth with enhanced SLA (service-level agreement) packages designed to lure anxious e-business customers.
From the UUNET’s infrastructure and QCS’ ASP (application service provider) viewpoint, SLAs can be crucial to a customer relationship. And to safeguard e-business applications, a customer needs such promises on both ends.
Two parts of Ashburn, Va.-based UUNET’s three-pronged SLA involve promised figures on its IP network. Specifically, UUNET promised 99 percent or greater packet delivery and issued new regional latency thresholds reducing its promised rate from 85 milliseconds to 65 milliseconds.
“At first glance, this looks like we are playing a numbers game, but if you think about it, these numbers are crucial to customers building networks around the world,” said Ralph Montfort, UUNET’s director of access products.
The final piece of the UUNET SLA involves dressing up its automatic credit offer for times when the company does not meet SLAs promised to corporate customers. UUNET now will offer SLA credit when it bungles SLAs for two consecutive months.
“The message I give is that these technical SLAs are good to have in place, but oftentimes they are not enough. What you really need are service-oriented SLAs as well,” said Mark Bouchard, senior analyst at Meta Group, in Stamford, Conn.
With the introduction of its new QCS ProofPositive package of SLAs, Qwest Cyber.Solutions is one of a number of service providers coming out with beefed up SLAs to reinforce delivery and trust commitments for customers.
ProofPositive includes some well-defined SLAs offered at three levels – 99, 99.7, and 99.99 per cent – and availability levels ranging from seven hours 20 minutes of downtime per month to no more than four minutes and 22 seconds for selected platforms, said John Charters, CEO of Denver-based QCS.
To ensure SLAs are being met, Charters said a third party is brought in on a quarterly basis to survey IT departments of those receiving the service. If less than 60 per cent of respondents are satisfied, QCS will repay money in terms of what was charged on a monthly basis.
Despite this increased cooperation, the nature of these up-front agreements can cast an awkward mood over customer-vendor exchanges, often resulting in third-party help to hammer out SLAs as well.
Educating customers not to overburden SLAs with as much information as they can cram in is a growing challenge, said Jay Looney, an attorney at Dallas-based ClearView Management Consultants.
“[Customers] can actually cause so much additional administrative work on behalf of the supplier of the service that you can impact the cost of the service, which is not what they want,” Looney said. ClearView has partnered with MySLA.com to oversee SLA implementation and management.
Looney said infrastructure providers have a slight edge over service providers in handling SLAs because they can concentrate on measuring via technical metrics vs. a growing reliance on ASPs to translate that knowledge into e-business terms and impact.