Digital Lexicon Hub

A formal agreement defining measurable service commitments, responsibilities, exclusions and remedies between a provider and customer.

An SLA sets measurable expectations for uptime, response and resolution, gives both parties a basis for remedies when service falls short, and helps buyers compare vendors on firm commitments.

A SaaS vendor commits to 99.9% monthly uptime, about 43 minutes of allowed downtime, and a 1-hour first response for priority 1 incidents, with a 10% service credit if uptime falls below that level.

Service credits rarely cover the customer's actual losses, and exclusions such as scheduled maintenance can weaken the headline figure. Hitting SLA metrics does not guarantee users are satisfied with service quality.

An SLA usually defines service scope, service level objectives (such as availability, latency or response time), the indicators and method used to measure them, exclusions, reporting, escalation and remedies such as service credits. Availability is often calculated as total minutes in the period minus downtime minutes, divided by total minutes. Internal SLOs are typically set tighter than the external SLA.