A service-level agreement is an agreement between two or more parties, where one is the customer and the others are service providers. This can be a legally binding formal or an informal “contract” (for example, internal department relationships).
The agreement may involve separate organizations, or different teams within one organization
Contracts between the service provider and other third parties are often (incorrectly) called SLAs – because the level of service has been set by the (principal) customer, there can be no “agreement” between third parties; these agreements are simply “contracts.” Operational-level agreements or OLAs, however, may be used by internal groups to support SLAs. If some aspect of a service has not been agreed with the customer, it is not an “SLA”.
Customer Based SLA – An agreement with an individual customer group, covering all the services they use. For example, an SLA between a supplier (IT service provider) and the finance department of a large organization for the services such as finance system, payroll system, billing system, procurement/purchase system, etc.
Service Based SLA – An agreement for all customers using the services being delivered by the service provider
Multilevel SLA – The SLA is split into the different levels, each addressing different set of customers for the same services, in the same SLA.
Service-level objectives (SLO)
A service level objective (SLO) is a key element of a service level
agreement (SLA) between a service provider and a customer. SLOs are
agreed as a means of measuring the performance of the Service Provider
and are outlined as a way of avoiding disputes between the two parties
based on misunderstanding.
There is often confusion in the use of SLA and SLO. The SLA is the
entire agreement that specifies what service is to be provided, how it
is supported, times, locations, costs, performance, and
responsibilities of the parties involved. SLOs are specific measurable
characteristics of the SLA such as availability, throughput,
frequency, response time, or quality.