Application service provider USinternetworking is expanding its service-level agreements to guarantee an application's actual performance, as opposed to its simple delivery. Analysts say it is one of the first ASPs to widely offer such guarantees.
"This is one thing we've found that ASPs need to do to gain traction," says Christine Ferrusi Ross, an analyst at Forrester Research Inc. "Basically, all the performance under the application won't make a difference if the application itself isn't running well."
Christopher Walker, a spokesman for USi, says the new SLA comes in response to customers who wanted the ASP to go beyond strictly 24-7 application availability. The performance-based SLA covers USi's hosted Microsoft Exchange 2000 service, but Walker says customers can expect the ASP to roll out performance-based guarantees for other applications.
USi's hosted applications include software from Ariba Inc., BroadVision Inc., Lawson Software Inc., Microsoft Corp., Oracle Corp., PeopleSoft Inc. and Siebel Systems Inc.
"This in effect becomes the next generation of the SLA: the performance-based SLA that's focused on business process and not just availability," Walker says.
The performance-based guarantee is tailored for individual clients and their application needs. USi reviews application usage before designing the SLA for each customer. In the case of messaging, the performance SLA covers logon, send, receive and calendar lookup transactions. Each SLA is unique and varies according to each customer's needs, Walker says.
The way it works is that the ASP measures transaction response times between the USi data center and the customer premises, where the USi circuit ends, says Bill Webb, vice president of product management for USi. An average response time is determined, "and if any of the transaction averages exceed the thresholds, the SLA is considered missed," Webb says.
If that happens, the situation is corrected and the customer receives financial reimbursement, which appears as a reduced monthly fee the next month, Walker says.
As customers put more and more business process onto networks, the performance of the application will be paramount, says Donna Scott, vice president and research director at Gartner Inc. She says more companies will demand performance guarantees.
"Although fewer than 15 percent of large enterprises measure the end-to-end availability and performance of critical applications today, we believe 75 percent will be doing so and measuring against predefined [SLAs] by year-end 2004," she says.
The performance-based SLA for hosted Exchange is available now.