A third of enterprises have experienced a breach of their service-level agreement, or SLA, with their wide area network service providers in the past year, according to new research. That number might be even higher because many enterprises aren’t actively monitoring SLA compliance today.
For its new research project, Next-Generation Wide Area Networking, Enterprise Management Associates (EMA) surveyed 200 North American and European IT professionals who were directly involved in planning, implementing and operating their organizations’ WANs. The research found that only 52% of enterprises actively monitor SLA compliance. EMA believes that if more enterprises were monitoring SLA performance, they would detect more SLA violations.
Provider SLAs and what they mean
When an enterprise procures managed services WAN connectivity, such as T1 lines, carrier Ethernet or MPLS, it usually receives an SLA in its service contract with the provider. The WAN SLA is the section of a service contract between an enterprise and a network service provider that documents minimum standards of network performance and availability. The SLA also defines what actions both parties will take when an SLA performance violation occurs.
An SLA is one of the major reasons why an enterprise connects remote sites with private WAN connections rather than with public internet connectivity. The SLA ensures that a service provider will provide a minimum level of service. This is a significant differentiation from internet-based connectivity, which is a best-effort network with no service guarantees.
An SLA is one of the major reasons why an enterprise connects remote sites with private WAN connections rather than with public internet connectivity.
EMA asked enterprises that have experienced an SLA performance violation in the past year to specify which actions they took in response. Some 68% of respondents said they received a service credit from their service providers as compensation for an SLA violation; this amounts to a period of free network services from the WAN provider. Furthermore, 61% of respondents said they received a financial reimbursement from their provider for a violation, while 51% received a free service upgrade.
The most uncommon action taken on an WAN SLA violation is the termination of the service, with only 29% taking that step. EMA was unsurprised by this low figure, as service termination is highly disruptive. It can take weeks or months to set up private WAN connections from another network provider.
Dissatisfaction with WAN performance goes beyond SLA violations
Since only half of enterprises actively monitor SLA performance, EMA suspects that the number of enterprises that experience poor performance with their WAN service providers is higher than the 30% who reported an SLA violation in the past year. This suspicion is validated by overall customer attitudes toward SLA compliance. When EMA asked these enterprises to describe their levels of satisfaction with their network service providers’ SLA performance, only 50% said they were satisfied. Of the rest, 41% said they were only somewhat satisfied, 8% said they were neutral on the subject and 1% were somewhat unsatisfied. Roughly half of companies are struggling with WAN SLA performance, even if only 30% have detected an SLA violation.
EMA research also found that the vast majority of enterprises are increasing the number of remote sites that connect to the WAN. A quarter of enterprises said the number of remote sites connected to their networks will grow by 25% or more this year. In an era when enterprises are becoming more distributed, network performance and availability will be more critical than ever. WAN SLA performance violations translate to employees and customers being unable to access applications and services. Productivity drops and revenue is lost.
A growing number of enterprises are relying on the internet to serve as their primary WAN connectivity technology. Performance guarantees, however, aren’t available for these connections. Instead, when service disruptions occur, ISPs offer their customers bandwidth at a lower price. While many enterprises are using the internet more — especially for web applications — private network connections like MPLS continue to be important for critical applications. Enterprises need to establish, monitor and enforce SLAs on these private WAN connections. Otherwise, they may as well be using internet connectivity for all their applications.
