Software as a Service - Service Level Agreement Template

A service level agreement (“SLA”) is a contract between a service provider or vendor and a client or customer. It outlines what the customer can expect in terms of quality of service from the vendor, and outlines what remedies the customer will be entitled to if that service level is not maintained. SLAs are a crucial aspect of a Software as a Service (“SaaS”) contract as, as the name implies, in SaaS the software is the service. In a traditional software licensing scheme a customer would not need promises from the vendor that the software would be available and accessible — Microsoft sells you a copy of Windows 10, you install it, and it will always be available as long as your hardware is functioning (maybe using Windows as an example for uptime was a mistake). However, for software that requires a continuing provision of service from the original vendor, customers typically want a guarantee that the service will remain available as long as they continue to make payments to the vendor.

An SLA is not intended to be a whitepaper outlining how the service is provided, nor is it a user manual for the customer to reference if they have a question. It is merely a contractual representation of what the vendor promises to provide to the customer.

Typically an SLA will include:

• Introduction. A section outlining what the SLA is, who it is by and between (defining the vendor and, sometimes, the customer), where the terms of service might be accessed, etc.
• Scope. The scope section of the SLA will define the parties involved, the time period the SLA will run for, the services that are covered, the services that are not covered and any other exclusions. Typically this section will read as outlining what is covered and broadly disclaiming any ancillary services not outlined.
• Responsibilities. The vendor has responsibilities, the customer has responsibilities, both need to be outlined. Vendor responsibilities include the provision of the service that the SLA contemplates, responding to support requests, resolving issues, etc. The customer may be tasked with ensuring their hardware remains functional and up to date, and notifying the vendor of any issues.
• Uptime Guarantees. This is the crux of the SLA. The vendor will guarantee some level of uptime (99.99%, 99.999%, etc.) and outline how that will be measured. This section may also outline what remedies the customer has if these levels are not maintained.
• Response Times. Just as the SLA outlines uptime guarantees, it may outline response times for service requests. Customer service has always been an important aspect of software sales, but in a SaaS situation doubly so. You want Microsoft to respond to your support requests quickly when your printer isn’t working, imagine how important their response would be if the answer to the printer problem might be on their end.
• Resolution Times. A resolution time section is optional, but can help put customers mind’s at ease. To the extent that a vendor can, they may want to make guarantees or set goalposts for the total amount of time it might take to resolve a support issue. This is obviously not always possible, but where possible it is an extra level of guarantee.
• Signatures.

The exact combination or permutation of the above sections may differ between SLAs, but the overarching structure will remain the same. An SLA will outline how consistently the service will remain available, what will happen if it is not made available, how quickly support requests will be responded to, and what will happen if those requests are not responded to. They will all outline what the vendor can guarantee, what they can’t guarantee, and what they disclaim.

The level of detail and precision necessary in an SLA will vary based on the type of service being made available and how much of the service is in the vendor’s hands.

Service Level Agreement Template

I have provided a SaaS Service Level Agreement Template as an example, and a a jumping off point. Please note, this is a boilerplate — that means it is not tailored at all to your specific needs. It should not be taken and used without thought, nor should sections be lifted from it and used unless you know their meaning and utility. I charge a nominal fee for the form.

Please get in touch if you want to discuss any of the ramifications for your business.