Most people are often confused when they hear the term SLA, SLO and SLI.

A recent study revealed that 74% of businesses struggle to clearly define and communicate SLAs, leading to misunderstandings and service disruptions.

The data indicates that while employees recognize the significance of these metrics for business growth and reliability, they lack guidance on how to initiate them.

In this blog, we'll explore Service Level Agreements (SLAs), Service Level Objectives (SLOs), and Service Level Indicators (SLIs). We'll als break down important elements and talk about the best practices to make services reliable.

Why SLAs, SLOs, and SLIs Matter for Your Business?

At times, distinguishing between SLA vs SLO, or SLO vs SLI can be confusing. However, here's a simple breakdown of the differences between SLA, SLO, and SLI:

SLA: An agreement between service provider and customer

SLO: Objectives set by the the organization based on SLI

SLI: Service level indicators set by the organization to assess the performance of the resource.

Companies can set up, assess, and monitor the commitments made to their service consumers through SLAs, SLOs, and SLIs.

What Are Service Level Agreements (SLAs)

The SLA definition is - An SLA is a written contract outlining quantifiable service quality standards between a service provider and a client. Typically, it includes response times, uptime, and error reporting.

For example, an agreement between service provider and customer can state how much time an incident will be acknowledged. Non-critical incidents should be acknowledged in one hour and critical incidents in fifteen minutes.

Failure to meet the agreed-upon level may result in penalties, such as partial reimbursement of membership charges or the addition of free subscription time.

SLA Elements

Typically, an SLA contains the following:

  • Service Scope, Description, and Hours
  • Support Details: Contact Information and Availability
  • Response and Fix Times
  • Deliverables and Timeframes
  • Change Approval and Implementation
  • Signatories
  • Responsibilities
  • Review Process
  • Glossary
  • Service Timelines

Advantages of SLAs

  • Service Assurance:Provides a clear framework for defining and assuring the quality of services.
  • Customer Satisfaction: It helps in setting and managing customer expectations.
  • Accountability and Transparency: Service Level Agreements promote accountability by clearly defining the responsibilities of both the service provider and the customer.
  • Incident Response and Resolution: The agreement provides incident response and resolution guidelines. They help prioritize and allocate resources effectively, ensuring timely incident resolution and minimizing customer impact.
  • Compliance and Legal Protection: It establishs a contractual agreement that can be enforced in case of breaches, ensuring compliance with regulatory requirements and minimizing potential legal disputes.

Now that you know about the SLA meaning and elements , let's go through some best practices.

SLA Best Practices

Here are some best practices which you need to follow while creating a Service Level Agreement(SLA):

  • Track and create unique SLAs for each IT service
  • Make SLAs quantifiable
  • Be in line with the objectives of the client
  • Regularly evaluate and modify SLAs
  • Make sure SLAs cover common and uncommon exceptions
  • Keep the language simple to avoid misunderstandings between you and the customer
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What are Service Level Objectives (SLOs)

Service-level objectives (SLOs) set goals for how well a business process or system should perform. They provide measurable targets to ensure the system always meets or exceeds the desired standards.

For instance, an SLO will be set for uptime of a service.

SLO: Ensure that at least 99.9% of the time the service is available.

SLO Elements

SLO contains the following:

  • The particular system or service to which it is applicable, such as the trade API.
  • The quantifiable objective is to achieve average API transaction times of under one millisecond.
  • The timeframe for achieving a target over a particular one-minute trading day.How often are you measuring your progress toward the goal? Do you do it every second during trading hours?

Advantages of SLOs

  • Ensuring Quality Service: The primary benefit of having an SLO is guaranteeing that your system meets or surpasses the desired standards.
  • Tracking Progress: It allows you to monitor and measure the performance of your system, providing valuable insights into areas that need improvement and areas where you are excelling.
  • Business Performance Evaluation: It helps you see if you're hitting your goals and figure out where you can make things better.

For example, If you own an online store, your SLO might mandate that 99 percent of orders are processed within 24 hours.

SLO Best Practices

  • While designing SLOs, less is more, i.e define SLOs that support the SLA.
  • Not every metric can be an SLO.
  • Focus on the SLOs that matter to clients and make as few commitments as possible.

For instance, Setting low or unrealistic SLO targets can lead to inaccurate product decisions and increased costs.

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What are Service level indicators (SLIs)

An SLI measures and assesses how well a system is performing.

An SLO (service level objective) is measured by an SLI (service level indicator).

For instance, if your SLA states that your database query will return response in 200 ms your SLO is most likely 200 ms response time , and your SLI is the actual measurement of your uptime. It might be 180 ms or 150ms.

The SLI must fulfill or surpass the commitments set in that agreement to continue complying with your SLA.

SLI Elements:

Here are the key elements of SLI:

  • The observation system
  • The performance indicators, often known as monitoring metrics or KPIs,
  • The results obtained
  • The frequency of measurement and reporting for the metric

Advantages of SLIs

  • Performance Measurement: SLIs provide a clear and measurable way to evaluate the performance of a system. It allows teams to assess how well the system meets its performance targets.
  • Data-Driven Decision-Making: Teams can improve system performance by making data-driven decisions by routinely monitoring SLIs to spot trends, patterns, and opportunities for improvement.
  • Service Improvement: Monitoring SLIs over time enables teams to identify performance bottlenecks, prioritize improvements, and assess the impact of system modifications or optimizations.

SLI Best Practices

  • Not every trackable metric needs to be an SLI.
  • Set realistic SLI targets.
  • Align SLIs with business goals.
  • Regularly review and monitor SLI effectiveness.
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How to Set the Right Targets for System Reliability

Rather than aiming for 100% uptime, it's essential to set a realistic reliability goal. This balance ensures both user satisfaction and the flexibility to update and enhance your service.

Your target should be a spot where:

  • Issues can be caught and fixed
  • Users stay satisfied
  • Development continues

Here are the details to help you better understand these metrics:

Reliability Target (Nines)

Downtime per 30 Days

Detection & Resolution

Impact

99.9% (3 Nines)

42 minutes

Monitor & Human intervention

Acceptable downtime, manageable impact

99.99% (4 Nines)

4.2 minutes

Monitor & Self-healing systems

Minimal downtime, self-healing preferred

99.999% (5 Nines)

24 seconds

Unrealistic to detect/resolve

Not achievable, hinders development

That concludes our discussion on SLA, SLO, and SLI for now.

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Essential Resources:

If you want to know more about SLA, SLO and SLI in detail, do checkout the below resources:

General FAQ for SLA, SLO & SLI

What does SLA stand for? SLA stands for Service Level Agreement. It is an official contract between the service provider and the client.
What is the objective of SLO? An SLO (service level objective) is a specific metric agreed upon within an SLA (service level agreement), such as uptime or response time.
What is SLI? SLI stands for Service Level Indicators that helps assess the performance of a resource and set an SLO based on its values.
What advantages do SLO and SLI offer? SLOs (Service Level Objectives) and SLIs (Service Level Indicators) offer several advantages such as: Provide measurable goals for service performance Enable organizations to track and improve service quality Enhance customer satisfaction Facilitate better incident management Promote transparency and accountability in meeting service standards.
Can you provide an instance of an SLA? An SLA(Service Level Agreement) is an agreement between a supplier and a customer. For example, the contract between the cloud service provider and a customer where uptime details are mentioned can be described as SLA.
What is the reason for using SLA? Here are three reasons why SLA is important: Sets clear guidelines/expectations for customers and vendors. It gives peace of mind to customers in case the vendor does not provide the services; they can hold him accountable. By adhering to customers' demands, being open, and maintaining a high level of service, SLA creates more business opportunities.
What do SLO standards entail? Service Level Objective (SLO) standards specify the desired level of performance or quality for a particular service. These standards define measurable metrics such as uptime, response time, or error rates that must be met or exceeded to ensure satisfactory service delivery. SLOs provide a clear target to strive for and help organizations monitor and improve their service performance.
What is involved in the SLO process? The SLO process entails evaluating data, goal-setting, using data to gauge progress, and modifying teaching in light of gathered data.
Could you provide an example of an SLI in SRE? An example of an SLI in SRE is how quickly a website responds to user requests. It measures the percentage of requests that get a timely response, like 95% of requests being answered within 200 milliseconds. By tracking this, teams can ensure the website is fast and responsive for users.
What is the definition of SLO in software? In an SLA, a specific statistic, such as uptime or response time, is agreed upon as an SLO (service level objective). SLOs are the promises you make to your customer, whereas the SLA is the legal agreement between you and your client.
Why is SLO necessary? Having an availability Service Level Objective (SLO) is crucial for making informed decisions about the reliability of a service. It allows teams and stakeholders to assess whether the service should be made more reliable or less reliable, considering cost, development speed, and stakeholder needs.

Anjali Udasi

As a technical writer, I love simplifying technical terms and write on latest technologies. Apart from that, I am interested in learning more about mental health and create awareness around it.