NetSuite Outage and Cloud Service SLAs

April 28, 2010
By djohnson

The recent outage at NetSuite reported by CRN includes a quote from Steve Jones, CEO of Explore Consulting (a NetSuite advocate), “occasional minor outages are just part of the reality of cloud computing today.”

This comment got us thinking, “What are the SLAs offered by some cloud providers?”

Keeping your ERP Application Running

Make sure you can run your application on premise or at a service provider that you choose. The last thing you want is to be locked-in to a service provider that cannot deliver reliable service.

The SLA is important, but ultimately you need to have the freedom of choice so you can select a datacenter that meets your price and uptime requirements.


Cloud Provider SLAs

Before the cloud, service level agreements were part of the telecommunications and internet service provider world. Now that computing power and storage is being offered in the cloud, SLAs have been extended to cloud resources by providers such as Amazon and Microsoft Azure.

Amazon breaks its SLA into storage and compute. The S3 (storage) SLA includes 99.9% uptime during a monthly billing cycle. The service credit percentage is either 10% or 25%, depending on the percentage of uptime. The EC2 (compute) SLA includes 99.95% availability during a service YEAR. The service credit in this case is 10%. More details available on Amazon’s website.

The Microsoft Windows Azure SLA includes 99.95% uptime for Computing Connectivity and 99.9% uptime for Database availability, Storage availability, and Service availability. Financial penalties are made in the form of credits which are based on the percentage of downtime. More details available on Microsoft’s website.

Cloud Application SLAs

Cloud applications ride on top of the cloud providers, although in some cases, a single company serves as both the cloud provider and the application provider. In many cases, specifics of the financial penalties are difficult to find, so we have provided only a few examples.

Salesforce does not provide a SLA and has been criticized for not doing so.
Applicor provides SLA tracking via their website and a “financial guarantee”, but the terms of the financial guarantee are not immediately available. Side note: many Aplicor SLA features seem more representative of an internet provider than a software provider.
NetSuite provides 99.5% uptime per month and returns the monthly subscription fee if they fail to comply. This recent outage means a lot of customers may get a free month.
Acumatica provides 99.5% uptime per month and returns the monthly subscription fee if they fail to comply. Acumatica’s application runs on top of Windows Azure, so their SLA encompasses the Windows Azure SLA plus the application level SLA for their ERP software.

SLA Details

The simple measure of percentage uptime is frequently the basis for service level agreements. However, there are several factors which determine how this is computed and other things you should be concerned about. A few of these are listed below.

Downtime calculation period
Providers measure downtime differently. In Amazon’s case, the month (or year) is broken into 5 minute intervals. This

Credit or refund
Providers may issue a credit to your account for the next month’s service or issue a refund to a prior payment.

Scheduled downtime
Providers may exclude scheduled downtime from their SLA calculations. In this case, you need to learn the definition of scheduled downtime.

Latency and performance
If it takes 20 seconds to get a response from your service, is the service considered down or just slow? By several definitions, the service would still be considered up, although it is certainly not very usable.

Assume that service goes down for 45 minutes between 2am and 3am local time. If nobody was using the service from your company, are you still entitled to a credit?

The Future of SLAs

Well defined service provider and application provider SLAs are critical to the application of cloud services. As cloud services mature, service level agreements will become standardized and may represent the Five-nine’s that are offered by many telecom utilities today.

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4 Responses to “ NetSuite Outage and Cloud Service SLAs ”

  1. Gerald Park on May 13, 2010 at 2:21 pm

    Epicor recently launched a new SaaS ERP offering for small manufacturers. I believe that they offer a similar service level agreement (SLA) to NetSuite and Acumatica – 99.5%. Maybe they got the idea from your article :-)

  2. djohnson on May 13, 2010 at 2:25 pm

    Gerald – thanks for the comment – let’s hope we can influence others through our blog. First we can standardize the SLA, maybe next we can work on data standards.

  3. Cloud Computing Leaders on July 27, 2010 at 12:46 pm

    The bad part of cloud computing is, if you lose internet may perhaps be due to a lightning strike, unpaid bill, ISP server glitch, etc) you can’t access any of your data!

  4. julien on December 6, 2010 at 11:44 am

    Another aspect of this is that in some critical moments, losing access to financial assets can represent lost much much bigger than the cost of the monthly fees. Losing a contract because you cant provide live data during a meeting with a potential customer is not something you wish to live.

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