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Service Level Agreement

A Service Level Agreement, also known as an "SLA", usually covers three topics:

  • response and resolution times for support and maintenance requests;
  • the "uptime" that a service provider will provide; and
  • how the provider will compensate users / customers if it fails to provide that uptime.

In many cases, the provider will create a credit system to compensate customers and users for downtime more than a specified amount.

For example, the Service Level Agreement might state that if the Services are available for less than 99.5% of the time over the period of a month, the provider will subtract 5% from the fees it charges for that month.

Keep in mind that 99.5% uptime over a month means that the product must not have downtime for longer than 3.72 hours.

There might be a sliding scale, so that fee discounts will increase as service levels get worse.


  • 5% discount for less than 99.8% availability;
  • 10% discount for less than 99.4% availability;
  • 20% discount for less than 99% availability.

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