Wednesday, November 14, 2007

Rackspace SLA = 99.9%. Penalties kick in.

Rackspace had a serious outage. Valleywag scooped the actual police report.

I think most Diggers are being too kind to Rackspace. I just checked with my hosting provider about this scenario:

"There are two Central Hudson utility transformers that feed our building. They are located behind locked fences at the Central Hudson sub station on the perimeter of our campus --- far from any roads.

Additionally, there are receiving and distribution transformers within our building on both the second floor of our mechanical plant and our data center. Again, these devices are not located near roads or traffic.

Lastly, our emergency generators are located in protective, sound enunciator houses to protect them from the environment / external elements. These generators are also not located anywhere near traffic flow."

I host with Cervalis btw. I ckecked with Rackspace's live chat attendant this AM. Their SLA is for 99.9% uptime, so penalties kicked in for affected customers.

Their penalities are a percentage off monthly fees equal to the portion of the montly outage. So if your company was down for .5% of the month, about 3.5 hours, you'd "save" .5% of your Rackspace fees. How crazy would you be if your business was SOL for 3.5 hours?? This SLA is lousy imho.


Graham Weston, Chairman of Rackspace said...

Rackspace actually promises its customers a 100% uptime guarantee, so no downtime is acceptable to us or our customers. Rackspace will happily keep its promise and pay on our SLA to all affected customers. It works like this: We refund our customers 5% of their monthly fee for every 30 min of downtime they experience and that amount grows by 5% with every additional 30 minute window that they are down. So, for example, if a customer experiences one minute of downtime, the refund would be 5% of their monthly fee. If they experienced 31 minutes of downtime, they would receive 10% of their monthly fee and so on, up to 100% of their monthly fee. Despite the SLA payout, we know that we let our customers down and we will make it right. We see this as an investment in restoring customers' faith in us. For more updates and information on the events surrounding the outage, you can visit

Steve Bywater said...

Thanks for the comment. That's much better than I had though, and I am *truly* impressed that you have taken the time to respond.

My idea of an SLA would be "150% of direct revenue lost." So if my website earns $1k a day ($41.67 every hour), and my hosting fees are $100 a month, my direct cost from a 3.5 hour, my lost revenue would be $145.83. But the SLA would only cover $30.

I admit, that's a difficult SLA to negotiate for every customer.

Steve Bywater said...

Update: Rackspace's recent problems aren't confined to the US: UK Power Cut.

Steve Bywater said...

Just this week Rackspace had another big outage, and specifies in an SEC filing that they will be crediting customers 2.5 to 3.5 millon dollars.