Tuesday, October 30, 2007

SLAs: Who gets penalized by what?

Network World

Wide Area Networking




Network World's Wide Area Networking Newsletter, 10/30/07

SLAs: Who gets penalized by what?

By Steve Taylor and Jim Metzler

Before we move to the topic at hand, a brief explanation. Last week we started a point-counterpoint on whether Application Acceleration functions should be integrated into the router or be handled by a separate appliance. However, there has been a delay in receiving the counterpoint position statement, so that will be forthcoming in a week or two.

Now on to a favorite topic, service-level agreements. We all know that an SLA for any service should be a standard part of the offering. And in some ongoing research on MPLS, we’re seeing very preliminary results that indicate users are relatively happy with their SLAs being delivered, with only 17% selecting this from a list of areas in which they are least satisfied as compared to 67% being unhappy with the time to deliver new circuits and/or services.

But what happens when you're unhappy? Are the penalties worth the paper they're written on?

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The first issue, of course, is how do you prove that the SLA is not being delivered upon. Doing a historical search of this newsletter’s archives will yield extensive discussion including defining outages, defining how these outages are measured, etc. of course, most of these discussions centered on frame relay, but the fundamental questions haven’t changed.

And what happens if you do get to a portion of the SLA where penalties kick in? You should make sure that the penalties penalize the service provider, not you. 

For instance, while you may want to have an option of canceling the entire agreement, that’s pretty drastic. You should first go for economic penalties that reduce the service price significantly. After all, canceling the contract means that you have to admit to your upper management that you made a bad choice in the first place. Further, you have to re-install and re-engineer the entire network. So even in the most extreme cases, the penalties should be that you have a gradual cutover as you leave the service provider – without economic penalties and with the explicit provision that the incumbent service provider will provide all reasonable (and even unreasonable) cooperation in working with the new service provider for a smooth transition.

Only then will you make sure that delivering on the SLA is providing the appropriate incentive to the service provider.

Editor's note: Starting Nov. 12 week, you will notice a number of enhancements to Network World newsletters that will provide you with more resources and more news links relevant to the newsletter's subject. Beginning Monday, Nov. 12, the Wide Area Networking Newsletter, written by Steve Taylor and Jim Metzler, will be merged with the WAN News Alert and will be named the Wide Area Networking Alert. You'll get Steve and Jim's analysis of the convergence and WAN market, which you will be able to read in full at NetworkWorld.com, plus links to the day's WAN news and other relevant resources. This Alert will be mailed on Tuesdays and Thursdays. We hope you will enjoy the enhancements and we thank you for reading Network World newsletters.


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Contact the author:

Steve Taylor is president of Distributed Networking Associates and publisher/editor-in-chief of Webtorials. For more detailed information on most of the topics discussed in this newsletter, connect to Webtorials, the premier site for Web-based educational presentations, white papers, and market research. Taylor can be reached at taylor@webtorials.com

Jim Metzler is the Vice President of Ashton, Metzler & Associates, a consulting organization that focuses on leveraging technology for business success. Jim assists vendors to refine product strategies, service providers to deploy technologies and services, and enterprises evolve their network infrastructure. He can be reached via e-mail.



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