What is Service Level Agreement?

Service Level Agreement, or SLA defines an agreement between an application service provider and its internal or external customers. In general, it is a part of service contract under which service is formally defined. An SLA should comprise of a specified level of service, enforcement and penalty provisions for services that are not delivered, support options, an assured level of system performance, such as downtime or uptime SLA, and what software and hardware resources are being privileged to the end users at what fee. In addition to establishing the performance and quality features, an SLA may include a metric, addressing the downtime and documentation for how the service provider will compensate the customers in case any of the contract breaches. An SLA should be periodically updated, and reviewed according to the changes in technology and the impact of any new regulatory directives.