Service-level agreements in the cloud

As cloud services develop and mature and an increasing number of suppliers compete for business in the cloud sector, one of the key differentiators between suppliers is the service-level agreements (SLAs) they are willing to offer. For customers, SLAs can provide a degree of certainty as to the qualitative aspects of the cloud services they can expect to receive. SLAs can also assist suppliers in quantifying and mitigating risk by providing an ascertainable contractual standard to which the supplier needs to perform. This article examines the development of SLAs in respect of cloud-based services and sets out some of the key market trends and issues to consider.

A key principle of any contract is to establish clear responsibilities in relation to each party within a liability framework, providing legal certainty of recourse in the event of a breach of contract. This is simple to achieve, monitor and enforce where a contract can deal with absolute requirements, such as of confidentiality — it is easy for both parties to know when the contractual requirement has been achieved or failed. The situation is more complex where an absolute requirement is not realistic and a certain amount of failure is expected. This is particularly the case with IT and IT-related services where there is an expectation and/or understanding that it will not always ‘work’ flawlessly. This can create a problem with traditional contractual provisions, for example with a requirement for a supplier to provide services to the standard of ‘reasonable skill and care’. How much ‘failure’ would therefore be permitted in a scenario where a flawless service is not expected before a supplier has failed to achieve this contractual standard of reasonable skill and care? To avoid this uncertainty and to minimise the requirement of lawyers and courtrooms to come to conclusions on such questions, SLAs are therefore used as an objective contractual measurement mechanism for a particular aspect of a service that allows a clearly defined amount of failure before a breach of contract occurs…

Click on the link below to read the rest of the Kemp Little briefing.

Sign in or Register to continue reading this article

Sign in


It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer


Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.


Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.


Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Analysis from The Lawyer

  • sapling

    Profit on the margins

    You don’t have to be a big firm to innovate and thrive in a downturn, as our look at the lower half of the UK 200 shows. We pick 10 inspiring stories

  • Chart4

    Good offices

    Making the most of your office space is a management priority these days, as exclusive new data in the UK 200 reveals


Cheapside House
138 Cheapside

Turnover (£m): 8.00
No. of lawyers: 37