Posted 05/15/2001
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SLA Assurance Growing in Importance for Providers, Customers
By Chris Garifo
With IP-based enhanced services becoming more important as a revenue source for carriers, SLA on those offerings have grown so vital, they are seen as mandatory.
However, those agreements are worth little more than the paper they're written on, unless the service providers and their customers have the means to measure the performance of the applications in real time--whether it's an IP VPN, e-mail, teleconferencing, unified messaging, video on demand or a service yet to be developed.
According to Sage Research Inc. (www.sageresearch.com), telecommunications companies have included SLAs with their offerings since the 1970s. However, then networks were less complex and downtime resulted in less significant dollar losses than today. As a result, SLAs were not as important as they are in this new century.
In fact, a Sage Research study released earlier this year shows that 41 percent of enterprises polled said they would demand a SLA the next time they chose a service provider. That number compares to 16 percent that reported SLAs were mandatory the last time they selected a service provider.
At the same time, 31 percent of the 148 enterprises polled said they would change service providers in the event of a SLA compliance dispute.
Enterprises aren't only looking for mandatory SLAs, but they're looking for "a more proactive SLA," says Jared Huizenga, a Sage Research project manager involved in the SLA study.
That means service providers have to spot, correct and recompense customers for any problems before customers inform the service providers of the problems.
"Enterprises want to be able to actually monitor, at their own site, SLA compliance," Huizenga says, adding that customers also want to receive an automatic credit for SLA disputes.
According to the Sage Research study, 82 percent of the enterprises indicated that automatic credits would be valuable.
"Enterprises have gotten pretty cynical about paper SLAs," says David Kaufman, director of product management for Brix Networks (www.brixnet.com), a Chelmsford, Mass.-based software company that develops performance evaluation solutions. "They want to see the data."
Although enterprises don't necessarily mistrust their service providers, Kaufman says, "There is a concern about whether the service providers have the tools to do this monitoring."
More Products Hitting Market
People attending this year's SUPERCOMM show likely will see new products targeted specifically for service assurance or included as part of an overall service management solution.
In the weeks leading up to SUPERCOMM, Trinagy Inc. (www.trinagy.com) rolled out its Insight Plus solutions, which are designed to help customers manage their networks, says Laura Spear, vice president of marketing at Trinagy.
Enterprises want to outsource their networks, service offerings and have proof that they're getting what they're paying for, Spear says. That means they need tools to provide proof and credibility back to their customers.
"Whether the operation is in-house or if it's being outsourced to somebody, and you're trying to provide services on top of that, you need to know who is accessing your services, when, and how frequently," Spear says.
SLA management goes beyond measuring bandwidth or sniffing out IP packets, Spear says. SLA assurance requires the ability to see everything that goes on in the network and how it affects performance on the customer's end; that is, at the network edges. That means providing accounting data--what Spear calls "call detail"--because it looks like call detail records.
For instance, Insight for Dial Access provides a measure at the user level, the phone-line level and at the network access service (NAS) level.
Spear says, "This is really exciting because now you have these wholesale dial-access providers--the big guys like Qwest [Communications International Inc., www.qwest.com] who are outsourcing their capabilities to retail service providers, and they're able to say, 'I can give you a report. I can tell you who is dialing and when. I can tell you the level of service that they're getting in terms of network access. I can tell you how much data is going in and out. I can tell you if you've had some down time. I can tell you if there's a problem.' And that will help you to be able to address them so you can have perfect service level agreements."
While it's pretty obvious why an enterprise would want the capability to monitor SLA compliance for its purposes, such monitoring also is crucial for the service providers, because failure to do so could result in too many instances of their customers reporting such problems. That kind of situation could mean dissatisfied customers who may withhold payment or move on to another service provider as soon as they can get free of their existing contract.
"One of the features that we think matters a lot to the service providers is having that proactive testing," Kaufman says. "Having the advance warning that something is beginning to go wrong with a SLA is really vital because, if there's an SLA outage, you have a one-in-three chance that you've lost that customer."
Kaufman agrees that bandwidth is only one part of the SLA assurance. He says that many customers really don't care about the actual measurements used to ensure compliance.
"What they care about is the performance of the entire service," Kaufman says. He explains that it doesn't matter if there's enough bandwidth between a company's headquarters and its branch office in another city if the servers providing VoIP service are overloaded and are dropping half the calls.
Brix Networks' flagship BrixWorx service level verification solution uses verifiers at the customer premises to measure and verify SLA compliance from that end. It also gives the service provider the ability to spot and respond to SLA problems before they reach the noncompliance threshold.
Another aspect of BrixWorx is the ability of the customer to see the same data that the service provider's help desk is looking at when discussing possible SLA infractions. Having such capability can be critical in preventing customer churn.
There are two deadly answers customers can hear from the help desk when they call with SLA problems, Kaufman says: "The first one is, 'Oh, really?'--which says, 'We didn't know that; We're not actually monitoring your SLA. We're just hoping that it passes.' And the other one is, 'It works from here. It seems to work for me.' Which says, again, 'We're not actually monitoring your service, we're monitoring the service from our call center.'"
To conduct proper SLA management, the service provider needs to maintain real-time, around-the-clock surveillance of their customers' own experiences with the service they're getting.
Keeping the customer's point of view in mind is a critical aspect of SLA assurance, says Didier Cop, vice president of marketing for Amplify.net Inc. (www.amplifynet.com), whose products include the iSurf family of IP service management solutions.
When dealing with value-added services like video, it's almost as if a residential approach is taken, where the real measure is customer satisfaction and churn control, rather than real metrics, Cop says.
For the service provider, SLA management strategy often will come down to a question of what data it wants to make available to its customers, Cop says. If a customer is getting a SLA, that customer should also be given a tool to measure compliance. If, however, the customer is getting a SLA, Cop says providing such a tool could be dangerous because, in most cases, such customers would be small businesses or residential customers using networks that are routinely oversubscribed.
Ultimately though, SLAs are internal tools that service providers can use to set up their networks in a way that matches the level of performance that they really want to deliver to their customers, to monitor it and to provision it.
"You are your own customer in terms of the service level agreement that you want to set up for the kind of service you want to deliver to your customers and to have ways to set up different metrics for different types of customers," Cop says. As a result, he says, service level assurance can be "a very non-contractual concept."
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