Software-as-a-Service (SaaS) constitutes a major share in all the cloud computing offerings. Since the physical contact between the service provider and the customer is minimal, the Service Level Agreements (SLAs) are the only means of a formal understanding between the two parties. The present work discusses the composition and requirements of the SLAs for the SaaS environment. A number of major cloud services have been analyzed to outline the most focused components in the SLAs. This includes the social media services, e-mail services as well as the commercial services. Since the number and type of the cloud services is increasing day-by-day, the SLAs are becoming more and more complex and challenging. The challenges to the SLAs in view of next generation services have also been discussed in the paper.

Cloud computing is a computing paradigm offering on-demand access to computing resources such as storage, security, software, monitoring, infrastructure, etc., via Internet. All these services are offered on a pay-as-you-go model and the operational costs become more important than the fixed costs. The upfront cost is minimal or zero in most of the cases. Cloud computing has basically three service models as: IaaS (Infrastructure as a Service), in which infrastructure such as hardware and storage, are provided to users as a service; PaaS (Platform as a Service), in which it provides platforms like operating systems or software development environment to programmers and users for building and running your programs; and Software as a Service (SaaS), in which it provides software applications and programs like documents editing services, messaging services, etc., to users. These applications and programs are run locally through the user’s Internet browsers on a pay-as-you-go basis or on monthly or yearly subscription basis. In all these transaction and relationships, the service level agreements play an important role to control the usage, quality levels and billing of the computing resources (Beardmore, 2009). Companies migrating to the cloud computing look towards the SLAs to give them some level of comfort about availability, performance, quality, maintenance, monitoring, security and so on.

SLA is an agreement signed and agreed between the user and the cloud service provider. Terms and conditions mentioned on SLA must satisfy the users before they start using or taking a service. Different cloud providers offer different types of SLAs based on their terms and conditions. SLA provides information to the user about the service levels offered in terms of quality of services, response time, availability, and so on. It records a common understanding about services, priorities, responsibilities, guarantees and warrantees. In cloud computing, SLAs are necessary to control the use of computing resources (Takabi et al., 2010). An SLA can provide secure collaboration and assure that services are provided according to preestablished rules (Almutairi et al., 2012). The SLA is generally presented by the vendor, but there is no reason that an organization has to agree to terms without discussion or additional interaction with an organization. The bottom line is that consumers are responsible to make sure that the SLA is fair and that it meets their needs (Cohen, 2012). SLA becomes the basis of formal understanding and communication between the service provider and the consumer. However, it basically defines the relationships between two parties. An SLA plays a vital role in building trust in cloud computing environment between the service consumers and service providers. Hence, it becomes necessary to investigate the relationship between the SLAs and trust building.

Information Technology Journal, Service level agreement, Cloud computing, SaaS.