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Official commitment between a service provider and a customer

A service level agreement (SLA) is an agreement between a service provider and a customer. Particular aspects of the service – quality, availability, responsibilities – are agreed between the service provider and the service user. The most common component of an SLA is that the services should be provided to the customer as agreed upon in the contract. As an example, Internet service providers and telcos will commonly include service level agreements within the terms of their contracts with customers to define the level(s) of service being sold in plain language terms. In this case, the SLA will typically have a technical definition of mean time between failures (MTBF), mean time to repair or mean time to recovery (MTTR); identifying which party is responsible for reporting faults or paying fees; responsibility for various data rates; throughput; jitter; or similar measurable details.

A service level agreement can track multiple performance metrics. In this context, these metrics are called service level indicators (SLIs). The target value of a given SLI is called a service level objective (SLO). In IT service management, a common case is a call center or service desk. SLAs in such cases usually refer to the following SLIs:
Abandonment Rate: Percentage of calls abandoned while waiting to be answered. A corresponding SLO may be: the abandonment rate of all the calls over the last 30 days should be < 30%. ASA (Average Speed to Answer): Average time (usually in seconds) it takes for a call to be answered by the service desk. A corresponding SLO may be: the ASA of all the calls over the last 30 days should be < 20 seconds. TSF (Time Service Factor): Percentage of calls answered within a definite timeframe, e. g., 80% in 20 seconds. A corresponding SLO may be: >90% of the calls over the last 30 days should be answered within 20 seconds. FCR (First Call Resolution): A metric that measures a contact center's ability for its agents to resolve a customer's inquiry or problem on the first call or contact. A corresponding SLO may be: the FCR of all cases over the last 30 days should be > 75%. TAT (Turn Around Time): Time taken to complete a certain task. TRT (total resolution time): Total time taken to complete a certain task. MTTR (Mean Time To Recover): Time taken to recover after an outage of service. Uptime is also a common metric, often used for data services such as shared hosting, virtual private servers and dedicated servers. Common agreements include percentage of network uptime, power uptime, number of scheduled maintenance windows, etc. Many SLAs track to the ITIL specifications when applied to IT services.

It is not uncommon for an internet backbone service provider (or network service provider) to explicitly state its SLA on its website. The U. S. Telecommunications Act of 1996 does not expressly mandate that companies have SLAs, but it does provide a framework for firms to do so in Sections 251 and 252. Section 252(c)(1) for example ("Duty to Negotiate") requires Incumbent local exchange carriers (ILECs) to negotiate in good faith about matters such as resale and access to rights of way. New emerging technologies such as 5G bring new complexities to the network operators. With more stringent SLAs and customer expectations, problem resolutions must be prioritized based on impacted subscribers.

With the introduction of 5G network slicing, the need of having a 360º view of the 5G slices becomes imperative to deliver premium SLAs and monetize service faster.

For fixed networks subscribers, service modeling appears to be one of the most suitable ways to effectively monitor SLA's and ensure they are met.

A web service level agreement (WSLA) is a standard for service level agreement compliance monitoring of web services. It allows authors to specify the performance metrics associated with a web service application, desired performance targets, and actions that should be performed when performance is not met. WSLA Language Specification, version 1.0 was published by IBM in 2001.

The underlying benefit of cloud computing is shared resources, which are supported by the underlying nature of a shared infrastructure environment. Thus, SLAs span across the cloud and are offered by service providers as a service based agreements rather than a customer based agreements. Measuring, monitoring and reporting on cloud performance is based on the end UX or their ability to consume resources. The downside of cloud computing relative to SLAs is the difficulty in determining the root cause of service interruptions due to the complex nature of the environment. As applications are moved from dedicated hardware into the cloud, they need to achieve the same even more demanding levels of service than classical installations. SLAs for cloud services focus on characteristics of the data center and more recently include characteristics of the network (see carrier cloud) to support end to end SLAs. Any SLA management strategy considers two well differentiated phases: negotiating the contract and monitoring its fulfillment in real time. Thus, SLA management encompasses the SLA contract definition: the basic schema with the QoS parameters; SLA negotiation; SLA monitoring; SLA violation detection; and SLA enforcement—according to defined policies. The main point is to build a new layer upon the grid, cloud, or SOA middleware able to create a negotiation mechanism between the providers and consumers of services. An example is the EU–funded Framework 7 research project, SLA@SOI, which is researching aspects of multi level, multi provider SLAs within service oriented infrastructure and cloud computing, while another EU funded project, VISION Cloud, has provided results concerning content oriented SLAs. FP7 IRMOS also investigated aspects of translating application level SLA terms to resource based attributes to bridge the gap between client side expectations and cloud provider resource management mechanisms. A summary of the results of various research projects in the area of SLAs (ranging from specifications to monitoring, management and enforcement) has been provided by the European Commission.

Outsourcing involves the transfer of responsibility from an organization to a supplier. This new arrangement is managed through a contract that may include one or more SLAs. The contract may involve financial penalties and the right to terminate if any of the SLA metrics are consistently missed. The setting, tracking and managing SLAs is an important part of the outsourcing relationship management (ORM) discipline. Specific SLAs are typically negotiated upfront as part of the outsourcing contract and used as one of the primary tools of outsourcing governance. In software development, specific SLAs can apply to application outsourcing contracts in line with standards in software quality, as well as recommendations provided by neutral organizations like CISQ, which has published numerous papers on the topic (such as Using Software Measurement in SLAs) that are available in to the public.