Monday, December 24, 2007

Service Level Agreement (SLA): Tips And Insights To Get More From Your Business Bandwidth Package

Q: What is a service level agreement (SLA)?

A service level agreement is a contract that sets performance goals as well as penalties for failure to meet these goals. In other words, an SLA commits a service provider to sharing responsibility for service reliability. Though SLAs often come with their fair share of hype and fine print, some do credit customers with a refund for every hour or portion of an hour of disrupted service. Providers may also offer credits if they miss a delivery date or don't report an outage promptly.

You may want to incorporate some additional provisions in your SLA, such as:

* Negotiate a more reliable connection that includes alternate routes for your data.

* Create on-call backup circuits.

* Attempt to specify more stringent penalties for service provider failures.

Because the terms of an SLA are negotiable and can vary significantly, they should be discussed up front with the provider.

Q: What types of provisions should be addressed in a service level agreement?

* Outage duration: The amount of time in minutes that service is unavailable

* Degraded service: Service which is slower than the performance specified in your contract

* Defects per million: Minutes of downtime per million minutes of service

* Mean time between failures (MTBF): Average amount of time, typically in minutes or days, between outages. (The target figure depends on your negotiated total-service-availability rate.)

* Mean time to restore (MTTR): Average amount of time, typically in minutes, required to restore service

* Maximum time between failures/maximum time to restore: A cap on the total number of minutes for restoration of service

* Trouble rate: How often technical support needs to be contacted. (This should be limited to five times before escalation is mandated.)

* Average round-trip latency: The time required for the first transmission to be completed. (The target should be less than 100 msec on the backbone and up to 130 msec longer from end to end, depending on the type of service being contracted for and on application requirements.)

* Average round-trip delay: The time it takes for routine transmission after the first transmission establishes the connection. (The target should be the same as the average round-trip latency.)

Q: What additional guidelines are recommended for negotiating a service level agreement?

* Pricing:

Expect wholesale prices to fall at least 50 percent per year on competitive routes.

Avoid long-term "IRU" or capital-type leases unless the lease payback is less than three years.

Include regular benchmark price reviews in contracts longer than one year.

Look for contracts that allow you to buy network capacity and that offer discounts for larger volumes, but which also allow you to alter the routing later at little or no cost.

Monitor prices and availability of dark optical fiber (unused fiber-optic cable), especially on terrestrial routes.

* Quality and Reliability:

Avoid multiple, service provider supply chains unless no alternative exists or the financial benefits are substantial.

Find out to what extent the network fiber is actually owned by the provider. If it's not, request information on its type and performance.

Inquire about and continue to monitor emerging bandwidth-on-demand products that might help you meet unexpected peaks in demand.

To ensure you get the most from your SLA .... it's highly recommended to take advantage of the no cost support provided by Bandwidth Cost when searching for quotes on T1, DS3, OC3, MPLS, Ethernet, and other business bandwidth solutions.

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