Your Business Is Cloud Ready, But Is Your SLA?

David White, is President North American Operations & Senior VP Global Business Development for Ipanema Technologies. David is a senior executive with more than 25 years experience and has a background in WAN Optimization in both enterprise and service provider markets.

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Today’s IT infrastructure directors find themselves in one of two situations. Either the business side of the organization is planning for SaaS applications that the Virtual Private Network (VPN) will need to support; or existing SaaS applications are underperforming and impacting the performance of other business applications.
Cloud is no longer a marketing buzz word but a reality. All the enterprises are today consciously or unconsciously using cloud computing to run their business.

Application performance and business productivity are strongly linked, so how can I guarantee top critical application performance taking into account that more and more applications are externalized in the cloud?

Market research firm Gartner forecasts that “through 2013, at least 60% of enterprises will experience slow or inconsistent application performance issues from externally hosted applications, due to improper network design.”

Moving from traditional, on-premise collaboration to a SaaS environment drastically changes the way applications using the Wide Area Network (WAN) are managed.

Adapting SLAs for the Cloud

For these and many other reasons, the need for a realistic application Service Level Agreement (SLA), a mutually agreed-upon contract that specifies cloud-based application performance between a service provider and the IT department - or between IT and different business units within the same organization - is critical. Based on a survey conducted by Ipanema, 78 percent of the cloud providers are chosen by IT executives based on the quality of their service commitments, or SLAs.

Today, we mainly see repressive and reactive SLAs. These SLAs consist in the definition of service performance commitments from a service supplier to its customer. If the objectives are not reached, the provider has direct or indirect financial penalties to pay to the customer as compensation.

These reactive SLAs are not efficient from our point of view because it is too late. The bad performance has strongly impacted the enterprise’s business productivity. At Ipanema we’ve made a customer survey that showed that Business and IT performance are tightly coupled. Losing five minutes per day for poor application performance means a 1% of productivity drop, which can reduce profitability by 10%. Imagine what those five minutes can cost if a customer in a retail store puts down her purchase since they don’t want to wait that long?

Establishing A Proactive Approach

That’s exactly why we consider that time has come to define proactive SLAs that could allow enterprises to anticipate application performance problems before they impact the end-users productivity and so the business.

SLAs that strive to prevent problems enable constructive dialogue between CIOs, service providers and business departments and align IT with the company’s core business objectives. However, prevention SLA implementation is not so simple. It’s critical to define what are the key applications, what performance indicators you will use; and who is responsible for them. Often the responsibilities are shared between the supplier and the client and can get a bit confusing.

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