What service-level agreements are channel companies and their partners putting in place? Comms Business finds out more.

Service Level Agreements (SLAs) have long been a staple of channel offerings across the UK, Ireland and beyond. The scope of these agreements varies, but the common ground is a contract between a service provider and a customer that documents what services the provider will deliver and defines the service standards the provider is obligated to meet.

These agreements are evolving alongside technology advances, and SLAs can be used by channel companies to stand out from their competitors. For Jamie Hughes, UK sales director, Evolve IP, SLAs allow all parties to understand what they can expect.

He said, “An SLA helps manage expectations and provide clarity. Everyone needs to know where they stand. An SLA ensures a supplier can be held accountable if something goes wrong and how quickly it gets resolved. Equally it prevents any unrealistic expectations from the customer where they could potentially demand too much from their network service providers.”

Hughes explained that Evolve IP has been able to win business around SLAs for Microsoft Teams-based voice services. He added, “Companies need reassurance and a safety net. What happens when business critical services go down? SLAs provide the answer without ambiguity and confusion. This is great for both parties.”

Craig Smith, technical account manager, Highlight, discussed the importance of making the customer the top priority. He said, “An SLA is an incredibly useful tool that benefits various stakeholders involved in a business relationship, including channel partners, vendors, customers, and end users. However, it is the end customer who benefits most from having an SLA in place.

“The SLA provides the customer with assurance and peace of mind that they will receive the expected level of service, reliability, and support from their vendor.”

Jon Selway, VP, channel sales, EMEA, Aryaka, added, “Primarily, SLAs provide assurance and peace of mind. That’s the crux of it. While residential customers may put up with the occasional outage, business customers won’t anymore, given their ever-increasing reliance on cloud services and 24/7 communication with their customers!”

Stefanie Hammond, who works with MSPs on sales and marketing at N-able, emphasised the importance of removing any uncertainty of responsibilities and expecations.

She said, “When looking at customer-level SLAs, it is always beneficial and a good business practice to spell out the rules of engagement between an MSP and its customers, so that everyone involved is aware of what the roles, responsibilities and terms of the relationship will be.

“An SLA reflects a time-commitment being made between the MSP and the end-customer and provides the needed clarity between the two parties involved. It can be referred back to whenever there are service delivery questions or ambiguity around perceived expectations and entitlements.

“Although we tend to think of SLAs as being more of a legal and business requirement, MSPs that employ SLAs can use them as a key differentiator to help highlight their dedication and commitment to customer service.”

Getting over the line

Effective SLAs are becoming increasingly important in securing customer contracts. Smith, from Highlight, discussed areas where SLAs might help finalise contract negotiations.

He said, “Case studies demonstrate the importance of SLAs in securing customer contracts. For instance, a telecommunications company might offer an SLA guaranteeing a minimum uptime for its network services to a corporate client. This ensures that the customer’s critical business operations remain uninterrupted, which is crucial for their productivity and competitiveness.

“In another case, an e-commerce platform might provide an SLA that guarantees a certain response time for customer inquiries. This commitment helps build trust with customers, enhances their overall experience, and leads to increased satisfaction and loyalty.”

Strong frameworks

So, what are the key elements that should be considered when developing an SLA? Smith, from Highlight, said, “SLAs create a clear contractual framework that sets performance expectations, establishes accountability, and protects the customer’s interests. Key elements that should be considered include defining specific metrics that can be measured, setting realistic performance targets, establishing clear lines of communication, and outlining the consequences if the agreed-upon standards are not met.”

Hughes, from Evolve IP, discussed his company’s approach to SLAs for the communications platforms it provides to partners. He said, “Network resilience is a crucial component when developing an SLA. We know of a rival platform which went down for three days. This was due to a single point of failure.

“With SLAs you need to build in a secondary mechanism of resolution for when things go wrong to prevent damaging the reputation of the service. You have to be confident to hit your SLA by being realistic and also have a buffer for worst case scenarios. Monthly testing is very important too to ensure any fail-over is fit for purpose.”

Mark Hollman, VP, partner development and success, Colt Technology Services, explained how SLAs can elevate your solutions beyond what your competitors are offering.

He said, “An SLA becomes next-level when it’s as detailed and transparent as possible. It’s important to include the usual outcomes: what are the non-negotiables for the end customer? What is the time to fix? 48 hours’ advanced notice for scheduled outages? Quarterly review meetings? But going a step further can differentiate your business.

“Make sure SLAs feed back into your customer experience strategy. What’s new that customers and partners are asking for? Are there any SLAs that you or the vendor are missing? Are there any processes you can simplify and automate to help you meet SLAs and deliver a better experience?

Selway, from Aryaka, said any SLA should include four key aspects: the terms should be transparent and clear, it should be measurable so you can verify compliance, there should be clear penalties for failing to meet the SLA, and the ability to collect the penalty should be easy.

He added, “Resellers and MSPs should find assurances from vendors that the numbers they will promote to their customers are real, provable and enforceable. Don’t be afraid to ask questions about the process for service credits and how they can verify the promises they make.”

He explained that SLAs should provide clarity on consequences for downtime, and working with a vendor who can provide assurances could be beneficial for a channel partner. He said, “While a few providers may – rightfully – boast 100 per cent uptime or networks that have never been breached, most legally binding SLAs will draw the line at 99.999 per cent as the highest commitment.

“These should be the key targets for MSPs and resellers wanting to truly separate themselves from the market… if they can prove those perfect numbers!”

Evolving expectations

It is also worth considering the reality that the disruption and opportunities presented by technological advances have also shifted customer expectations. This, in turn, is changing the SLAs that are put in place.

Smith, from Highlight, explained, “Customer expectations are constantly evolving in today’s fast-paced world, and they now expect higher service levels, faster response times, and personalised experiences. Technological advancements, changing market dynamics, and increased competition have all contributed to this shift.

“As a result, SLAs should be flexible, scalable, and agile, while also providing proactive support to meet the evolving needs of customers, and ultimately enhancing the customer experience and fostering long-term relationships.”

Hollman, from Colt Technology Services, added, “End user experience continues to be the growing differentiator, in both customer and employee contexts. Application-level SLAs are becoming more important; there are multiple tools that can now score application performance, and indeed SD WAN technologies have the capabilities to recognise and optimise application performance and downstream user experience too.

“Self-service and automation continue to drive expectations; digitalising and automating processes and communications boost security and accuracy, and it’s empowering for customers as well. Building in flexibility is so important, and it’s reassuring for customers to know they’re not locked into rigid, inflexible contracts.”

For Evolve IP’s Hughes, the biggest shift he is seeing is around 24/7 support. Hughes said, “This is the main driver as businesses can’t be without critical services. We are doing a lot more business in international locations and need to provide the same levels of support whenever and wherever it is needed. Historically there would be an 8-6 service desk backed by on-call engineers.

“A lot of providers were not set up to raise small requests at the crack of dawn. That’s changing now as expectations move towards 365 24/7. If a customer is based in Australia, they want the same service provided from a UK support desk.”

The emergence of frequent sophisticate cyberattacks, targeting even small businesses is also compelling SLAs to cover more ground.

Hammond, from N-able, said, “Within the changing security landscape and with cyberattacks becoming increasingly more sophisticated and more prevalent, customers are expecting that their MSP is doing everything they can to keep their network safe and secure from potential attacks.

“But with the changing security landscape, nothing is 100 per cent guaranteed, so MSPs should be including clauses that can help protect them and their business should their end-customer become breached that is outside of the MSPs control, assuming the MSP has implemented a comprehensive security program at the customer’s location.

“If the MSP is the type of MSP that will allow for multiple levels of security programmes, then each level should have its own SLA to clearly outline what is covered and what is not covered.

“That should include limited liability clauses to put the risk back onto the shoulders of the customer because with decreased security protection coverage, the breach risk increases, and the MSP should not be held liability for the customer’s decision to forgo more comprehensive coverage due to budget or cost constraints – so having individual programme levels will help protect the MSP.”

Access to data

SLAs can be particularly complex in the Channel as the partnerships behind some offerings can mean MSPs, resellers or distributors might need to go through more steps to understand the service they can expect from the solutions within their portfolios. Real-time data on the performance of infrastructure, services or products could help provide clarity.

Highlight’s Smith explained, “An enterprise may be dazzled by impressive promises bound-up in an SLA, only to discover down the line that it is at best over-blown and at worst empty. MSPs often lack transparency when it comes to the performance of their products because they lack the tools for service managers to show network data in a way that is relevant or understandable to their customers.

“Similarly, dissatisfied enterprise customers often resent the contractual constraints that prevent them from insisting on better performance from their MSP, especially when they feel that reporting from their service provider is opaque.

“Both the enterprise and service provider can benefit from having a real-time shared view of their network service infrastructure. With this level of transparency, both MSP and customer have a 24/7 warts-and-all running commentary on delivery against SLA. This provides just the kind of openness upon which a trusted relationship is built.”

Smith emphasised the importance of meeting service expectations. He said, “When it comes to delivering on SLAs, it is important for an MSP to be able to demonstrate reliability, expertise and transparency, not just talk about it.”

This market report appeared in our July 2023 print issue. You can read the magazine in full here.