Gary Audin
Gary Audin is the President of Delphi, Inc. He has more than 40 years of computer, communications and security...
Read Full Bio >>

Gary Audin | July 21, 2014 |


Getting Cloud Credit

Getting Cloud Credit Service failures beg the questions, “What does my service level agreement cover?” “Do I receive an account credit?” “Is it worth the time to submit a claim?” “What is the credit worth?”

Service failures beg the questions, “What does my service level agreement cover?” “Do I receive an account credit?” “Is it worth the time to submit a claim?” “What is the credit worth?”

Subscribing to cloud services is very popular, for several reasons:

• The enterprise moves from CAPEX to OPEX financing.
• New services/features/functions become available.
• Someone else has to manage the IT service.

But there are, of course, risks involved with moving to a cloud. The most recent illustration of this was when Microsoft's cloud-based Office 365 service suffered an extended outage.

This recent failure prompted the questions, "What does my service level agreement cover?" "Do I receive an account credit?" "Is it worth the time to submit a claim?" "What is the credit worth?" Although the Microsoft failure is the impetus for writing this blog, the same concerns relate to any cloud-based service.

Microsoft Service Level Agreement (SLA)
Lync Online is covered by "The Service Level Agreement for Microsoft Online Services" (available here: OnlineSvcsConsolidatedSLA(WW)(English)(July2014))

The loss of Lync Online is defined by Microsoft in their service level agreement as "Any period of time when end users are unable to see presence status, conduct instant messaging conversations, or initiate online meetings."

When a service fails, then the provider's definition of downtime becomes important. Measuring downtime by the provider may not include all events that the customer considers as downtime, events like scheduled downtime when the customer cannot use the service. The Microsoft definition of downtime; "Downtime means a period during which the aspects of a Service specified in the following table are unavailable, excluding (i) Scheduled Downtime; and (ii) unavailability of a Service due to limitations described in Section 5(a) below. Downtime is measured in the units set forth in Section 3." These units are measured in minutes over a period of one month. (Refer to the linked document above for more information.)

Measuring Availability by Microsoft
The agreement has a metric "Monthly Uptime Percentage," which is used to calculate the percentage of uptime. The common measure for availability is:


In the case of the Microsoft SLA, the uptime and downtime are measured in minutes per month.

Downtime is calculated in minutes over a one month period multiplied by the number of users impacted by the failure. If the Lync Online service is experiencing less than 99.9% uptime, then the enterprise is eligible for a credit.

Calculating the Credit
Microsoft has three levels of credit according to the table below.


Delivering 99.9% availability looks good until you read the exceptions that are not included in the calculation. It does not include the network access, none of the enterprise infrastructure, conditions outside the control of Microsoft (e.g., natural disaster, war, terrorism, government action...). When you add in all of the exceptions, the enterprise does not have a service with 99.9% availability. This is not a criticism; it is an observation of the real availability to the user.

The recent service failure was reported to be an interruption of about 9 hours. Using a month of 30 days X 24 hours X 60 minutes, then the operational time is 43,200 minutes in a month. A nine hour failure is 540 minutes long. By this calculation, the customer received 99% availability and can apply for a credit of only 25% – not enough to cover the costs the customer may incur collecting the claim information.

To get a 100% credit, the service must be out more than 36 hours, one and a half days, a disaster for most businesses. There is no way the 100% credit would come close to compensating the business for its incurred costs because of the service failure.

What looks really bad is the 100% credit. The enterprise has to experience greater than a 5% loss of service over a month, an intolerable condition for most operations, before it is eligible for a full refund. This also means that with a loss of 5%, only a 50% credit is awarded - pretty poor service delivery. Who would subscribe to such a service? Many have. Think of the cost to the enterprise if this were to occur.

Claiming a Credit
In hosted services, the service provider may, at their discretion, automatically offer a credit. This has happened occasionally, but it is much more likely that enterprise IT staff has to collect data and apply for a credit.

For a claim with Office 365, IT staff have to provide:

• A detailed description of the failure
• The length of time there was a service outage
• What locations were affected
• How many users were affected
• A description of the enterprise attempts to resolve the failure

The claim for credit has a limited time window. The claim must be submitted by the end of the month following the failure, and you may have to wait 45 days before you will be notified of the credit. The credit will be applied to future monthly service fees.

It is hard to determine if filing a claim is worth the effort. Producing the claim is a distraction for the IT staff. The real question is whether the IT staff labor for filing claim is more than offset by the credit received? To know the answer, the IT staff may have to complete the claim anyway to see if it is worth the effort. This means the enterprise will still expend the IT staff labor whether or not a claim is filed.

Some IT executives may not want to expend the effort, especially when the IT staff is assigned to high-value projects. The CIO may set a policy of beginning a claim process when an outage exceeds 1 or 2 hours. Otherwise it may not be worth the effort.

If no claim is filed, then what is the value of a credit? I suggest that Microsoft customers claim as much as possible. More claims for greater credits may stimulate Microsoft to deliver better service to reduce the cost of claim processing as well as the amount of claim rewards. Downtime is also a hit to Microsoft's reputation.


Enterprise Connect Orlando 2018
March 12-15 | Orlando, FL

Connect with the Entire Enterprise Communications & Collaboration Ecosystem

Stay Up-to-Date: Hear industry visionaries in Keynotes and General Sessions delivering the latest insight on UC, mobility, collaboration and cloud

Grow Your Network: Connect with the largest gathering of enterprise IT and business leaders and influencers

Learn From Industry Leaders: Attend a full range of Conference Sessions, Free Programs and Special Events

Evaluate All Your Options: Engage with 190+ of the leading equipment, software and service providers

Have Fun! Mingle with sponsors, exhibitors, attendees, guest speakers and industry players during evening receptions

Register now with code NOJITTEREB to save $200 Off Advance Rates or get a FREE Expo Pass!

March 7, 2018

Video collaboration is experiencing significant change and innovation-how can your enterprise take advantage? In this webinar, leading industry analyst Ira Weinstein will present detailed analysis

February 21, 2018

Business agility has become the strongest driver for enterprises to begin migrating their communications to the cloud-and its a benefit that enterprises are already realizing. To gain this benefit

February 7, 2018

Enterprises are starting to grasp the critical importance of security and compliance in their team collaboration deployments. And once the risks are mitigated, your enterprise can integrate these n

March 12, 2018
An effective E-911 implementation doesn't just happen; it takes a solid strategy. Tune in for tips from IT expert Irwin Lazar, of Nemertes Research.
March 9, 2018
IT consultant Steve Leaden lays out the whys and how-tos of getting the green light for your convergence strategy.
March 7, 2018
In advance of his speech tech tutorial at EC18, communications analyst Jon Arnold explores what voice means in a post-PBX world.
February 28, 2018
Voice engagement isn't about a simple phone call any longer, but rather a conversational experience that crosses from one channel to the next, as Daniel Hong, a VP and research director with Forrester....
February 16, 2018
What trends and technologies should you be up on for your contact center? Sheila McGee-Smith, Contact Center & Customer Experience track chair for Enterprise Connect 2018, gives us the lowdown.
February 9, 2018
Melanie Turek, VP of connected work research at Frost & Sullivan, walks us through key components -- and sticking points -- of customer-oriented digital transformation projects.
February 2, 2018
UC consultant Marty Parker has crunched lots of numbers evaluating UC options; tune in for what he's learned and tips for your own analysis.
January 26, 2018
Don't miss out on the fun! Organizer Alan Quayle shares details of his pre-Enterprise Connect hackathon, TADHack-mini '18, showcasing programmable communications.
December 20, 2017
Kevin Kieller, partner with enableUC, provides advice on how to move forward with your Skype for Business and Teams deployments.
December 20, 2017
Zeus Kerravala, principal analyst with ZK Research, shares his perspective on artificial intelligence and the future of team collaboration.
December 20, 2017
Delanda Coleman, Microsoft senior marketing manager, explains the Teams vision and shares use case examples.
November 30, 2017
With a ruling on the FCC's proposed order to dismantle the Open Internet Order expected this month, communications technology attorney Martha Buyer walks us through what's at stake.
October 23, 2017
Wondering which Office 365 collaboration tool to use when? Get quick pointers from CBT Nuggets instructor Simona Millham.
September 22, 2017
In this podcast, we explore the future of work with Robert Brown, AVP of the Cognizant Center for the Future of Work, who helps us answer the question, "What do we do when machines do everything?"
September 8, 2017
Greg Collins, a technology analyst and strategist with Exact Ventures, delivers a status report on 5G implementation plans and tells enterprises why they shouldn't wait to move ahead on potential use ....
August 25, 2017
Find out what business considerations are driving the SIP trunking market today, and learn a bit about how satisfied enterprises are with their providers. We talk with John Malone, president of The Ea....
August 16, 2017
World Vision U.S. is finding lots of goodness in RingCentral's cloud communications service, but as Randy Boyd, infrastructure architect at the global humanitarian nonprofit, tells us, he and his team....
August 11, 2017
Alicia Gee, director of unified communications at Sutter Physician Services, oversees the technical team supporting a 1,000-agent contact center running on Genesys PureConnect. She catches us up on th....
August 4, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, has lately been working on integrating enterprise communications into Internet of Things ecosystems. He shares examples and off....
July 27, 2017
Industry watcher Elka Popova, a Frost & Sullivan program director, shares her perspective on this acquisition, discussing Mitel's market positioning, why the move makes sense, and more.
July 14, 2017
Lantre Barr, founder and CEO of Blacc Spot Media, urges any enterprise that's been on the fence about integrating real-time communications into business workflows to jump off and get started. Tune and....
June 28, 2017
Communications expert Tsahi Levent-Levi, author of the popular blog, keeps a running tally and comprehensive overview of communications platform-as-a-service offerings in his "Choosing a W....
June 9, 2017
If you think telecom expense management applies to nothing more than business phone lines, think again. Hyoun Park, founder and principal investigator with technology advisory Amalgam Insights, tells ....
June 2, 2017
Enterprises strategizing on mobility today, including for internal collaboration, don't have the luxury of learning as they go. Tony Rizzo, enterprise mobility specialist with Blue Hill Research, expl....
May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.