Service Level Agreement

A Service Level Agreement (SLA) establishes the contractual foundation for service delivery expectations between a provider and its customers. In the context of information security and compliance, SLAs typically address system availability (e.g., 99.9% uptime), performance benchmarks (response times, throughput), support responsiveness (time to acknowledge and resolve issues by severity), data handling commitments (backup frequency, retention, recovery objectives), security commitments (encryption standards, access controls, incident notification timelines), and remedies for non-compliance (service credits, termination rights). SLAs transform abstract service promises into measurable, enforceable commitments.

SLAs are relevant to compliance in several ways. ISO 27001 Annex A controls on supplier relationships (A.5.19-A.5.23) require that security requirements are addressed in supplier agreements, and SLAs are the primary vehicle for codifying these requirements. SOC 2 reports often reference the system's service commitments and system requirements, which are typically defined in SLAs. When these commitments relate to availability, an SLA becomes part of the SOC 2 evaluation scope. GDPR Article 28 requires written agreements between controllers and processors that include specific data protection provisions — these are often incorporated into or referenced alongside SLAs. NIS2 requires essential entities to assess the quality of their suppliers' services, and SLAs provide the benchmarks against which quality is measured.

For SaaS companies, well-designed SLAs serve both commercial and compliance purposes. From a commercial perspective, they build customer confidence and differentiate the service in the market. From a compliance perspective, they demonstrate that the organization has defined service commitments and has mechanisms to measure and report against them. Organizations should ensure their SLAs are realistic and achievable (promising 100% uptime is neither credible nor achievable), supported by monitoring and reporting systems that can verify compliance, reviewed and updated as service capabilities evolve, and aligned with the organization's internal operational capabilities and its own dependencies on upstream providers. SLA management should include regular reporting to customers, transparent incident communication, and continuous improvement of service delivery to consistently exceed commitments.