Have you ever experienced the frustration of logging into your favorite streaming service to watch a movie, only to find that the service is down? Now imagine the frustration you'd feel if  the cloud infrastructure that runs your entire business went down.

This scenario describes the importance of “service availability” in a nutshell. Whether you're a provider of services, or relying on services provided by others, service availability and service level agreements are extremely important concepts to understand. 

Today, SVT will thoroughly explain the importance of service availability and service level agreements, and why they matter for your business. 

Understanding Service Availability

Unlike brick and mortar businesses that keep traditional working hours, the world of the internet and information technology (IT) never sleeps. Services must be reliably and consistently available to their customers. 

We use the term service availability as a proxy for vendor reliability. Service availability describes the amount of time that a service is available to its users. In other words, service availability represents the likelihood that a service will be available for use when it is called upon by a customer.

Service availability is important because enterprises and their customers expect to get service when they need it. When services are not available as expected, there can be significant financial and reputational consequences for a business.

Service Availability: Vendor vs Customer Perspectives

Service availability is a two way street. Thus, it's important to understand service availability from both the perspective of the vendor and customer. 

As vendors, maintaining high service availability is critical to customer satisfaction. However maintaining service availability can be challenging. Vendors must invest in infrastructure, staff, and be ever vigilant against security threats. Deliver on your service promises, and customers are more likely to stay with you and even recommend you to others. 

As customers, the ability to provide consistent uptime is likely to be the most important factor when choosing a service provider. When service providers fail to meet their promises, it can wreak havoc on a business, impacting operations and potentially even damaging your reputation. 

For both vendors and customers, service availability is a crucial component of a successful relationship.

Measuring Availability – Uptime vs. Downtime

So how do we measure service availability? This is typically calculated via two factors: uptime vs. downtime.

• Uptime - The total amount of time that a service is operational.

• Downtime - The period of time when a service is not available. 

Service availability is typically expressed as the uptime percentage. To calculate this, we divide the uptime by the total time available in a period, and multiply the result by 100%. For up time percentage calculations, the total time is usually measured by a factor such as hours in a month, quarter, or year. 

Here is an example of a service availability calculation:

Service X was up for a total of 700 hours in a 30 day period (consisting of 720 hours). 

To calculate the service availability, we divide 700/720, and multiply the result by 100%. This gives us a service availability (or uptime percentage) of 97.22%.

The total service availability of 97.22% sounds respectable. But that also means there was a down time of 2.68%. 

Whether that percentage is actually acceptable or not depends on the terms laid out in the service level agreement. In many enterprise use cases, this can be 99%, 99.9% or even 99.999% in the most mission critical applications.

Service Level Agreements

When an enterprise and a service provider agree to work together, they enter into a formal arrangement called a Service Level Agreement (SLA). An SLA is a legally binding promise that the service provider agrees to maintain the promised level of service.

For vendors, service level agreements help them manage and allocate their resources to meet customer requirements. 

For customers, SLAs provide a clear understanding of the service levels they will receive, and help them hold providers accountable for delivering that level of service. 

Going back to the example, if the service provider promised a service availability level of 99.99%, then the uptime of 97.22% would fall well below that mark. 

That is why it is extremely important to make sure that your SLAs promise achievable performance that can consistently be reached if you are the provider, or that you require to run your business as the customer. 

Other key terms included in an SLA are:

• Service Details - The details of the service being provided. 

• Service Level Objectives - Specific service level goals set internally by the service provider, along with the metrics used to measure performance.

• Service Level Targets - Specific promises made for the level of service delivered to the customer. 

• Response Time - How soon a vendor will respond (not to solve) to a service request. 

• Resolution Time - The amount of time it takes for a provider to resolve a service issue.

• Cancelation Conditions - The protocols for terminating an SLA.

While these are some of the most important aspects of an SLA, this is not a complete list. We strongly recommend consulting with an experienced legal professional before entering into a binding SLA to be sure you understand the nuances of these important components of service contracts. 

Why Service Availability and SLAs Matter for Your Business

Service availability and service level agreements are critical tools in establishing vendor reliability and client trust. Setting expectations that can be easily monitored helps ensure a positive relationship.

Below are some key ways that service availability and SLAs matter for business: 

Vendor Reliability

Customer's appreciate vendor reliability and SLA's serve to define acceptable performances, keeping vendors accountable for the services they provide. They also set expectations for customers who can be satisfied as long as the agreed upon standards are met.

Financial Impact

When critical services experience more than expected downtime, the financial consequences can be severe. SLA's work to keep disruptions to a minimum, and can ensure that service credits, damages, or the right to terminate are available as appropriate actions when SLA targets are not met. 

Dispute Resolution

Having a strong service level agreement in place provides a framework for addressing issues, and facilitates speedy resolutions when service failures or disputes occur. 

Conclusion

Both service availability and service level agreements are critical tools in establishing vendor reliability and mutual trust in business relationships. By prioritizing service availability, businesses increase their operational efficiency and ensure customer satisfaction, while a well defined service level agreement protects the relationship and ensures accountability.  

At SVT Law Advisors, we have been helping organizations navigate the complexities of technology law for over 25 years. We can help you develop and implement a custom service level agreement that helps you achieve all of these goals whether you are a service provider or customer.

Contact SVT today for a free consultation on how we can help safeguard your partnership with a comprehensive service level agreement. We provide clear, no nonsense, actionable advice that will protect you and your business interests in any service arrangement. Contact SVT today.