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DRAFT Notes on the Main Issues of Cloud Computing Contracts (prepared by the UNCITRAL secretariat, 2019): Service level agreement (SLA)
180907-N-BK152-003 by NSWC Crane Corporate Communications is in the public domain
The service level agreement (SLA) contains performance parameters against which the delivery of the cloud computing services, the extent of the contractual obligations and possible contractual breaches of the provider will be measured. Information technology specialists are normally involved in the formulation of the performance parameters.
Quantitative performance parameters usually relate to capacity (a specified capacity of data storage or specified amount of memory available to the running program), downtime or outages, latency, persistency of data storage, uptime, support services (e.g., during the customer’s operating hours or 24/7), and incident and disaster management and recovery plans. The latter may include the maximum incident resolution time, the maximum first response time, recovery point objectives and recovery time objectives.
Qualitative performance parameters may relate to data deletion, data localization requirements, portability, security and data protection/privacy. Some aspects of service may be measured against both qualitative and quantitative performance parameters. For example, elasticity and scalability may be defined with reference to both the maximum available resources within a specified minimum period and the quality and security of the measures that may need to be adapted to the varying degrees of sensitivity of the stored customer data. Encryption may be expressed as a defined bit value at rest, in transit and in use. In addition to or instead of such a quantitative parameter, encryption may be measured against a qualitative parameter (e.g., the provider is to ensure that customer data are encrypted whenever they are transported over a public communication network and whenever they are at rest in data centres used by the provider).
Different commitments (i.e., obligations of result or of best efforts) could be agreed upon depending in particular on the terms of payment and whether standardized commoditized multi-subscriber solutions are provided. The type of commitment would have implications, including for the burden of proof in case of dispute.
Performance measurement
The parties may include in the contract a measurement methodology and procedures, specifying in particular a reference period for the measurement of services (daily, weekly, monthly, etc.), service delivery reporting mechanisms (i.e., the frequency and form of such reporting), the role and responsibilities of the parties and metrics to be used (e.g., metrics at the point of provision or at the point of consumption of services). The parties may agree on an independent measurement of performance and how the related costs are to be allocated.
The customer is normally interested in measuring services during peak hours, i.e., when they are most needed. The customer is usually able to measure, or verify the measurements provided by the provider or third parties, of only those metrics that are based on performance at the point of consumption, but not those based on system performance at the point of provision of services. The customer may be able to evaluate the performance at the point of provision of services based on reports provided by the provider or third parties. The provider may agree to provide the customer with performance reports on demand, periodically (daily, weekly, monthly, etc.) or following a particular incident. Alternatively, the provider may agree to grant the customer the right to review the provider’s records related to the service-level measurements. Some providers enable customers to monitor data on service performance in real time.
The contract may oblige either or both parties to maintain records about the provision and consumption of services for a certain length of time. Such information may be useful in negotiating any amendments to the contract and in case of disputes.