SLA (Service Level Agreement)
An SLA is a contractual promise about service reliability, usually with penalties if the target is missed.
A Service Level Agreement is the reliability commitment you make to customers in a contract — for example 99.9% availability over a calendar month — typically backed by service credits or refunds if you breach it. It is a business document, not just an engineering target: it defines what is measured, how it is measured, what is excluded, and what the customer is owed when you fall short.
Why it matters: an SLA sets external expectations and real financial liability. It shapes procurement decisions, anchors enterprise sales, and determines what an outage actually costs you in credits. Because it is contractual, the wording — measurement window, exclusions, credit schedule — matters as much as the headline percentage.
A common misconception is that the SLA and the team's internal target should be the same number. They should not. The SLA should be deliberately looser than your internal SLO, giving you headroom to miss the objective without breaching the contract. If you promise customers the exact number you are managing to, a single bad month becomes a financial event.
An SLA is only as credible as the SLIs behind it. You can only promise what you can measure, so the indicators that feed an SLA must be accurate, agreed upon, and observed the same way both parties would verify them.
Frequently asked questions
- What is the difference between an SLA and an SLO?
- An SLA is an external, contractual promise with penalties for breach. An SLO is the internal target a team manages to. The SLO should be stricter than the SLA so the team has buffer before a contract is at risk.
- What happens if an SLA is breached?
- The contract usually specifies a remedy — most often service credits proportional to the shortfall. The exact schedule, claim process, and any exclusions (such as planned maintenance) are defined in the agreement itself.
- Should every service have an SLA?
- Not necessarily. SLAs make sense for paid, customer-facing services where reliability is contractually material. Many internal or free services run on SLOs alone, without a contractual commitment.
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