Stepping up to multitiered service-level agreements

The fact that we live in a world of dependencies is becoming increasingly apparent in the Internet age. If you're in enterprise IT, you probably have to manage not only your own environment but also keep track of a wide range of services, such as WANs, e-businesses, applications hosting and managed services of various kinds.

While these services are supposed to make your life easier they also expose you to a lot of dependencies that are only marginally within your control. If you are a service provider you also may have to step up to the fact that your end-user clients also depend on a whole mix of other service providers. So how do you manage these environments? How do you control what politically and organizationally is beyond your purview?

One way is to create " multitiered " service-level agreements, in which the business impact of specific SLAs with multiple service providers are pulled together into a single roadmap. Contractually, this can mean that a service provider will assume full responsibility for an end-user service, and handle other service provider dependencies relevant to that service with separate contracts that reflect or support the end-user SLA.

In recent research on SLA, the Electronic Messaging Association queried both service providers and enterprise users about their service-level management strategies and requirements. An encouragingly high number - 77% - of the service providers assumed full responsibility to the end user in these situations. In this case, the multitiered SLA helps the provider to organize responsibilities and penalties to map to the end-user contract for which its service is provisioned and billed. When the end-user service is impacted by a problem outside the customer-facing service provider's domain, the multitiered SLA often provides a ready-made course of redress, which is typically centered around financial penalties. These SLAs also can be important in terms of processes and escalation procedures for managing problems.

For the enterprise, multitiered SLAs provide a meaningful way to cluster relevant services to a business process that may affect third parties outside the business. For example, an investment firm's online trading may depend, at minimum, on a T-1 link and Web hosting capability from two different suppliers. The investment firm will clearly want to monitor and guarantee effective availability and performance metrics for its client customers. By organizing its separate contractual requirements to realistically reflect its end-service needs, this enterprise is creating a de facto multitiered SLA. This SLA also may include internal functions not provided from an outside service provider such as in-house database performance. Identifying and monitoring each of these components is essential if the enterprise IT organization is going to effectively monitor, measure and manage its online trading service.

Multitiered SLAs are a positive sign and more than half of the respondents we interviewed in our survey have, or at least believe they have, some form of multitiered SLA in place, typically with two or more service providers. You should view this as the beginning of a long evolution toward managing interdependencies with management software, process and legal implications - all of which will affect the other going forward. Negotiating contracts, selecting tool sets, and planning for business growth are all impacted by these requirements. The concept of " multitiered SLAs " may not provide many answers, but it is an excellent departure point for formulating the right questions.

Dennis Drogseth is a director with Enterprise Management Associates, a leading analyst and market research firm based in Boulder, Colorado, focusing exclusively on all aspects of enterprise management. Dennis has extensive experience in network management platforms and products and is researching trends in management software and changing IT roles internationally. His 18-plus years of experience in high-tech includes positions at IBM and Cabletron. He has been quoted in the press and is a speaker at industry events. He can be reached via e-mail.

Audrey Rasmussen is a research director with Enterprise Management Associates in Boulder, Colorado, a leading analyst and market research firm focusing exclusively on all aspects of enterprise management. Audrey has more than 20 years of experience working with distributed systems, applications and networks. Her current focus at EMA is e-business, SMB/SME and MSPs. She can be reached via e-mail.

Enterprise Management Associates in Boulder, Colorado, is a leading analyst and market research firm focusing exclusively on all aspects of enterprise management software and services.

Archive of Network World on Network Systems Management newsletters