Analyst: Cloud SLAs are "mediocre" at best

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Analyst: Cloud SLAs are "mediocre" at best

Third-party insurance market to emerge.

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A market for new business continuity insurance policies could emerge to address what analysts call "mediocre" service level agreements (SLAs) from cloud computing providers.

According to Yankee Group analyst Camille Mendler, the security and reliability of cloud services are currently the main barriers to uptake.

Citing the firm's study of 46 cloud services from 41 providers, Mendler highlighted a "mediocrity" of public cloud SLAs.

Only 54 percent of providers surveyed offered an SLA. Some 43 percent notified customers of changes to contract terms and only nine percent gave over 72 hours' notice before maintenance took place.

While she believed cloud computing to be as significant as the "industrial revolution of the 19th century", Mendler said there remained implementation issues, including: holistic service management; next-generation data centres; security; dual-stack IP; interconnect; and a high-speed network.

"The concept of cloud computing is not the issue; it's how it's assured," Mendler said.

"It's pretty much the wild west in terms of public cloud environments ... few cloud services are road-tested for mission-critical reliability."'s platform director Peter Coffee said cloud computing SLAs should call for "transparency, specificity and immediacy" when dealing with disruptions.

Like its fellow cloud computing giants Google and Amazon, boasts high redundancy and more than 99.9 percent uptime. Coffee said it would take "two major meteor strikes" to disrupt its service.

Even so, he recognised a demand for risk mitigation that these companies could not fully address.

"Insurance is something you do as a business decision," he told iTnews.

"I believe that we will soon see a marketplace for business IT risk management that is way more efficiently priced."

Coffee did not expect to venture into that arena, saying: "We are in the business of writing really efficient code, not the business of risk."

Read on to Page Two for how one Australian customer is mitigating risks in the cloud...

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