Customer recommendations
As in any good business relationship, trust may be the most important factor. However, all risks can't be removed, so there is still an element of caveat emptor, and customers should be wary of any deal that seems too good to be true.
Be wary of an ASP that enters negotiations with unhesitating agreement to every request. Sometimes a vendor will offer 100 percent uptime guarantees, for example, but chances are that the ASP will ask the customer to take on the monitoring task or has hiked its higher rates in anticipation of the likelihood that it will be paying penalties.
Look for an ASP that offers monitoring software to track the metrics that have been set. The monitoring should track and log the metrics that you've identified as critical to your particular business.
Beware of too much flexibility. Although some vendors will negotiate on terms, both parties are best served when the terms are clearly and narrowly defined. Flexibility, a key requirement in many situations, may mean that you are not fully covered in certain instances. More often than not, an ASP will have already carefully crafted its SLA and will be reluctant to make sweeping changes. However, some providers offer tiered service levels to allow customers to choose a service that best meets their needs. As the complexity of the service provider offerings increases, though, customised offerings are promising to become more of a norm.
Make sure your SLA includes terms that clearly outline what happens in specific instances. For example, a "change management" clause stipulates that a customer can't change the system in ways that might undermine performance without notifying the ASP. Another clause might specify what level of failure of service allows the customer to get out of its contract without penalty.
Know when you can expect payback for an SLA violation. Does your vendor address its delivery failure at the moment of violation or after a set amount of time? Ask about the maximum service credit. Many ASPs will insure that they will pay up to seven to fourteen days of outages or up to a set amount (such as US$2,000 or US$5,000). Make sure that the ASP isn't putting the burden of risk on the customer.
Today, no standard exists for SLAs. However, the ASP Industry Consortium has stated its commitment to creating precisely these sorts of guidelines. The consortium is the global advocacy group promoting the ASP industry by sponsoring research and articulating the strategic and measurable benefits of this delivery model. The group has more than 700 members in 30 countries (including Australia) on five continents, including independent software vendors (ISVs), network service providers, and ASPs. As a starting point, the group has developed a "Buyer's Guide to Service Level Agreements for Application Service Provisioning."
Before you contract an ASP, make sure your prospective service provider spells out the ins and outs of its services, because in the end, your customers will blame you--not your ASP--for failed service.
