Do MSPs Need Service Level Agreements?

During a panel discussion at the Kaseya User Conference, an interesting debate popped up: Do managed service providers really need to offer service level agreements (SLAs)? And if so, how should they be written? I heard a range of opinions, but here are the three I heard most often.

Opinion 1 – Keep It Vague:  Offer “half” an SLA, promising that you’ll hit key metrics (for instance, perhaps you can offer three-nines reliability or one-hour emergency response support). But don’t put in writing the penalties you’ll pay for failing to meet those SLA metrics.

One member of the MSPmentor 100 told the audience that he uses that approach, and no customers have ever balked at the vague SLA agreement. His big concern was paying back-fees to customers if his one-hour emergency response actually required 65 minutes. As long as he was in the ballpark with his SLAs, customers were happy, the MSP said.

Opinion 2 –  Include the Semi Colon: In other words, this service level agreement outlines what you’ll offer; and what penalties you’ll pay if you don’t fulfill the SLA.

Opinion 3 – Try to avoid SLAs altogether: Is this really possible in the managed services industry?

I’m sure there are other options and approaches.  I’m all ears. Let the debate continue.