Most providers limit their maximum exposure to SLA credits to 15%, or 20% of the royalties collected. Some allow up to 100% credit in a given month, but no more than 20% per year. These caps mean that while poor performance could reduce the supplier`s profit margin, it would generally not result in a loss for the supplier. If they are willing to take more risks, they either have great confidence in their delivery capabilities or considerable margins from which they can work. Or maybe they`re just very aggressive when it comes to doing business at all costs. Service availability: the time available for the usage service. This can be measured on the basis of the window of opportunity, for example between the hours of 8.m and 6 P.m. an availability of 99.5% and an availability of more or less at other times. E-commerce operations usually have extremely aggressive SLAs at all times; 99.999 percent uptime is a non-unusual condition for a site that generates millions of dollars an hour. The service elements include the particularities of the services provided (and what is excluded if there is reason to doubt), the conditions of availability of the service, standards such as the window of opportunity for each level of service (for example, prime time and non-prime time may have different levels of service), the responsibilities of each party, escalation procedures and cost/service trade-offs. Generally, the larger and more established the provider, the less they put revenue at risk for service level credits. The big ones have the established name and the largest list of customers and therefore can compromise less revenue because they adopt a good service. Smaller providers often put their revenues at risk more in the form of service level credits to offset their supposedly higher risk to the customer.
This is a bit retrograde, given that the small business may be competing on price, may have higher costs, and probably have lower margins to cover credit…
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