What is a Service Level Agreement (SLA)?

What is a Service Level Agreement?

A Service Level Agreement is a documented promise between a service provider and a customer that defines what’s expected—and what happens when those expectations aren’t met. It outlines how services will perform, what “good” looks like, and the consequences of falling short.

SLAs take the guesswork out of service delivery. They bring structure, reduce risk, and keep everyone honest.

Why SLAs matter

Every digital service makes a promise. SLAs make sure that the promise is measurable, enforceable, and tied to real-world performance.

They help you:

• Set expectations for uptime, response time, and availability
• Hold vendors accountable when something breaks
• Align service delivery with business impact
• Protect operations with defined remedies
• Track and optimize performance over time

Without an SLA, there’s no baseline—just assumptions.

How SLAs work

At their core, SLAs define service performance in plain terms. Most include:

1. Availability targets (e.g., 99.9% uptime per month)
2. Response and resolution times for incidents or requests
3. Scope and responsibilities—what’s covered, what’s not
4. Exclusions—events outside the provider’s control
5. Penalties or remedies for missed targets (like service credits)

SLAs are usually enforced through automated monitoring and regular reviews. And they’re just as critical for internal teams as they are for external providers.

An SLA in action

A cloud provider guarantees 99.95% uptime. One month, they dip below target. The SLA kicks in, and the customer gets a service credit—automatically.

It’s not just about compensation. It’s about trust, transparency, and a system that backs it up.

What makes SLAs effective?

Strong SLAs don’t try to cover everything. They focus on what matters, and therefore remain easy to manage.

Here’s what works:

• Stick to metrics that drive outcomes
• Measure only what providers can control
• Keep it simple and review it often
• Use dashboards for real-time visibility
• Define clear remedies and escalation paths

If the SLA doesn’t help you act or improve, it’s just noise.

The bottom line

Service Level Agreements keep services honest. They define the line between acceptable and unacceptable—and what happens when that line is crossed.

For any team delivering critical services—internally or externally—an SLA isn’t just nice to have. It’s a safeguard for performance, accountability, and resilience.