Cloud Computing

Service Level Agreement

Definition

A Service-Level Agreement (SLA) is a commitment between a service provider and a client. Particular aspects of the service – quality, availability, responsibilities – are agreed between the service provider and the service user.

Why It Matters

SLAs are critical for enterprise customers using the cloud. They define the level of reliability a customer can expect from a service, and specify what credits or compensation will be provided if the provider fails to meet that level.

Contextual Example

A cloud storage service might offer a 99.9% uptime SLA. This means they guarantee the service will be available 99.9% of the time. If an outage causes them to miss this target in a given month, they will provide a service credit to affected customers.

Common Misunderstandings

  • SLAs do not guarantee that a service will never go down; they guarantee a certain percentage of uptime and provide a remedy if that guarantee is not met.
  • Uptime is often measured in "nines". 99.9% ("three nines") is about 8.77 hours of downtime per year. 99.999% ("five nines") is about 5.26 minutes per year.

Related Terms

Last Updated: December 17, 2025