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Cloud SLAs: Pricing, Not Promises

Both Amazon Web Services and Windows Azure offer service level agreements for VM availability. The numbers are pretty good, too: 99.95% for both EC2 and Windows Azure Virtual Machines. Most people I talk with look at these numbers and assume that the cloud providers are promising this level of availability. The truth, though, is somewhat different. These cloud SLAs are really about pricing, not promises.

Here’s why.

What happens if either AWS or Windows Azure fails to meet their published SLA? The answer is that you get credits–discounts–on the money you spent on the service that month. At most, they’ll take your bill for the month down to zero.

When I give talks about public cloud platforms, one of the most common questions I get is whether the cloud vendor will agree to pay penalties that actually make up for business losses when failures occur. For the big players, the answer (publicly, at least) is no. They’ll just give you discounts on the cloud services you bought that month.

Some cloud service providers even offer 100% SLAs, a number that’s awfully hard to maintain. It looks great in ads, though, and since failing to meet it occasionally just means giving customers a discount, why not claim it?

So are SLAs meaningless? No. Even though the big cloud providers aren’t really making promises about availability, they are putting their reputations on the line. Over time, any cloud vendor that doesn’t meet its published SLAs will have a hard time attracting and keeping customers. This gives them a strong incentive to hit their published targets.

Still, don’t be confused. These SLAs are discounting mechanisms, not guaranteed service levels. They’re about pricing, not promises.

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