Users are the one thing that all IT companies have in common.  

Developing a technology product involves providing a service to people, whether you’re  Google, which serves a billion monthly active users who use your service for free, or Salesforce, which has 3.75 million paying subscribers.

Because of this, businesses must comprehend and uphold SLAs and SLOs—the two acronyms that stand for the commitments we make to our customers and the internal goals that enable us to fulfil those commitments.

Getting vendors and clients alike to agree on system performance is the aim of these two initiatives. On what schedule will your systems be accessible? How soon, in the event of a system failure, will your team react? What type of guarantees do you have about functionality and speed? Users are curious, which is why SLAs and SLOs. 

But what exactly are SLA’s and SLO’s? In this detailed guide, we’ll take you through the difference between SLO and SLA and their various dynamics. 

Come read with us!

What is SLA?

A service level agreement, or SLA, is a contract that specifies quantifiable measures like timeliness, uptime, and duties between a client and a supplier. 

These contracts, which are usually drafted by a company’s legal and new business departments, outline the obligations you have to your clients and the repercussions of breaking those obligations. Financial fines, service credits, or licence extensions are typical outcomes.

Who needs SLA? 

An SLA is a contract between a vendor and a client who makes payments. Businesses that give away services to customers are unlikely to require or seek a SLA for those customers.

What is a SLO?

An SLA’s (service level agreement) goal is a consensus regarding a certain statistic, such as response time or uptime. SLOs (Service Level Objectives) are the specific commitments you make to a customer if the SLA is the official contract between you and that customer. SLOs are what inform IT and DevOps teams of what targets they must meet and how they should evaluate their performance. They also set customer expectations.

Who Needs SLO? 

SLOs can be helpful for both paid and unpaid accounts, as well as internal and external customers. CRMs, customer data repositories, intranets, and other internal systems can be just as significant as systems that are visible to the outside world. Additionally, having SLOs for such internal systems is crucial to achieving internal teams’ goals that involve interacting with customers as well as business goals.

Best Practices of SLA & SLO

  1. Make A Plan Beforehand

It usually takes months to plan, test, and upgrade technologies and processes before introducing SLAs. To develop a clear SLA support strategy and practise using internal SLOs for incident response, business stakeholders from engineering, support, and operations organisations should work with business stakeholders from the sales and legal departments. 

If you’re currently using some incident management tool or are looking to adapt one in your current process, check out PagerDuty alternatives that can save you money and also enhance your incident management process.

  1. Stay Transparent

SLAs are frequently hidden as a formal contract provision in the hopes that clients will forget about them and not ask for a refund if they are broken. SLAs that are visible on a public service status page assist in coordinating a provider’s activities with its customers’ expectations.

To further instil the SLOs in the company culture, some providers even go so far as to put them on real monitors in their offices, where they are utilised in service-level agreements with clients.

  1. Measure SLAs objectively: 

To replicate the actions of end users accessing the platform from a distance, third-party testing tools situated outside the company’s network should be used to measure SLAs. One instance of this type of test could be a ping test carried out by an independent testing company having locations all over the world.

In a nutshell

SLA and SLO differ primarily in that a formal commitment and its outcomes are involved. A service level agreement (SLA) is a financial commitment, whereas a service level objective (SLO) is a best-effort target.

Setting up SLOs enables teams to work together towards a single, measurable objective and achieve the degree of customer satisfaction required for business success. Before formally committing SLOs to customers, it is preferable to begin measuring and privately communicating them within a company several months or even years in advance. Start small to allow your business the time it needs to develop the procedures, equipment, and service architecture required to uphold legally enforceable agreements.