By Béatrice Piquer-Durand, VP Marketing at Ipanema Technologies

The Service Level Agreement (SLA) is something all operators aiming at the enterprise networking and services market have had in place for many years.

Designed to provide enterprise customers with a level of reliability and a feeling of security, SLAs are negotiated between customers and service providers in terms of network up-time and availability.

But are standard SLAs still fit for purpose? I don’t believe so. An often-cited SLA is the five 9’s or 99.999 percent up-time, which should leave customers feeling secure and be a powerful means for service providers to differentiate. Sadly, that’s not really the case anymore. Everything is relative – both the level of performance customers seek and the attractiveness of an SLA to enable differentiation.

The game has fundamentally changed. Enterprise customers no longer simply want a network to be “up”. They want the applications that users actually consume to perform well, 100 percent of the time.

After all, it is absolutely possible for a network itself to be functioning well, but for the applications that are delivered over it to experience performance problems such as slowness or non-responsiveness. It’s persistent, regular application performance problems that really hit productivity over the long-term.

For operators the ability to offer a compelling five 9’s SLA has lost its edge. Many can deliver high levels of network availability, but an SLA structured around the network alone isn’t likely to win deals or reassure productivity conscious CIOs.  

Proactive control means enforced application SLAs
So what’s the future for SLAs? In a world where enterprise-focused operators are increasingly bolstering their service portfolios and profitability by offering higher-margin applications (like digital signage, Unified Communications or enterprise software systems), the SLA still has a fundamental role to play. What operators need now are application-centric SLAs which offer customers clear performance parameters for individual applications.

The SLA concept itself also needs to develop. It’s no good simply to meet with customers after the fact and agree levels of compensation relating to down-time. That’s the old approach, which does little for the customer experience or the morale of the operator’s team.

Rather, operators should be viewing application control as a means to pre-empt technical problems before they occur, predicting and pre-empting can increase satisfaction and reduce compensation paid.  

This comes down to operators being able to proactively control the performance of applications delivered over the network. This is in order to react faster than the performance problems occur and to measure this performance against an SLA.

In today’s increasingly complex network environment, where applications are often competing for resources over a certain amount of bandwidth, it isn’t always clear where issues originate. Adding a new UC tool might create application and network delays – not because of network issues, but because the application is fighting against others for valuable network resources.

Those operators that have tools in place will be able to adapt and solve the application performance issues in most cases before end users feel the pain. In the unlikely event the problem has not be solved they will be able to check reports and see if it’s a network problem or a server problem – identifying where responsibility lies between service providers and a customer’s IT infrastructure. 

Being pre-emptive with SLAs
The days of an SLA being used as an insurance policy for the customer must come to an end. It is far more productive to view the agreement as a set of targets that both operator and customer will jointly work towards – a means to improve operational performance.

Today, the control loop is too long and it’s taking too long to fix issues. Consider a recent statistic from our KillerApps 2013 survey, which we undertook with with enterprise service provider Easynet: it revealed that 42 percent of companies are turning to user complaints as the primary means to identify application performance problems.

This can hurt the customer experience and also cost the business. Increasingly, what customers are looking for from their operator partners is the ability to take pre-emptive measures so productivity is maintained. For the operator this reduces retrospective SLA compensation situations.

The bottom line
In today’s market, there are continuous, real-time control tools with embedded data inspection technologies, which allow operators to see what’s happening across their networks, control applications, and be pre-emptive. They provide the ability to control application traffic flows in a self-learning way, providing application performance guarantees.

But offering application-centric SLAs is not a simple process. Complexity comes from the fact that operators and their customers must define what the key applications are, what performance indicators will be used, how they will be measured and who is responsible for what.

Often, the responsibilities are shared between the supplier and the customer, which can become confusing. The good news is that there are now tools that can solve these problems on behalf of the operators and help them to provide true application performance SLAs to their customers.

Yet it is through such approaches that operators can re-invent the SLA into something that is useful and enables them to differentiate once again. Perhaps more important still, this approach brings service providers closer to their customers and despite bigger service level promises, can actually reduce instances of compensation needing to be paid.

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