SLAs: The Ties That Bind

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Solution providers continue to adopt managed services at a rapid pace. According to the VARBusiness State of the Market study, 41 percent of solution providers are offering some form of managed services, and 22 percent will add services this year.

The list of potential service offerings is exhaustive: network monitoring and management; security monitoring and response; patch management; storage and disaster recovery/business continuity; e-mail and voice communications; online training; help desks and even printer management.

"There's not a day when I don't wake up and think of another service we could offer [as an annuity]," says Al Gossett, president and CEO of service provider Digital DNS, Greenville, S.C.

But getting into managed services isn't as easy as flicking a switch. For some services, solution providers must build substantial infrastructure and expertise before they can place a single node under management. But those challenges pale in comparison to meeting the operating expectations of a service agreement.

Service-level agreements (SLAs) are more than contractual obligations. They establish the expectations of a customer and set the tone of the relationship with the service provider. A good SLA will spell out everything from what services the VAR will supply and how; limitations on the VAR's actions and reach inside the customer's infrastructure; appropriate response actions and times; escalation procedures and reporting requirements. Often, SLAs will outline performance rewards and penalties.

"Setting the appropriate service expectations with customers" is one of the most important factors, says James Hare, vice president of worldwide sales at SilverBack Technologies, an enabler of managed services and a VARBusiness five-star partner program vendor.

Solution providers interested in making the leap into managed services need to understand the costs of certain SLA levels and how to establish expectations carefully. "Done right, service-level agreements can be an effective sales tool and can help customers understand the value they're getting," Hare says.

NEXT: What you need to consider when drafting and negotiating SLAs with clients: