Office 365 99.9% Uptime SLA Explained

James HodgeManaging Director
Business IT Professional specialising in Consultancy, Business Relationship Management, Infrastructure Solutions and IT Project Management
Microsoft acknowledged that a potential move to the cloud made businesses wary of not having control over their Email Servers and therefore, not being able to influence uptime and availability of services. So when Microsoft released Office 365 to market, it was offered with a 99.9% financially backed uptime guarantee.

So all business owners who utilise Office 365 for their organisation can sleep soundly at night, safe in the knowledge that Microsoft has promised them their services will be available 99.9% of the time, and in the case that Microsoft does not meet this promise, they will be financially reimbursed.

But do these business owners really know the details of this promise? Have any of them even read the SLA provided by Microsoft? Most have probably seen the marketing material offering this promise and took it at face value. In this Article, I get down to the facts, and summarise some understanding of the marketed 99.9% financially backed uptime guarantee.

Simply, the SLA offers that if the services that you have subscribed to are not available for 99.9% of the time, you will be financially reimbursed. But what do the terms ‘uptime’ and ‘downtime’ actually mean in this context, and how are they defined?  

Microsoft defines ‘Downtime’ as ‘any period of time when users are unable to send or receive email via all supported mailbox access which is calculated using Exchange application availability in database minutes and combined data where applicable from server, operating system, application, network segments and infrastructure services managed by Microsoft’.

The 99.9% is calculated as a ‘Monthly uptime percentage’. This is defined by Microsoft as
‘Calculated by taking the total number of minutes in a calendar month multiplied by the total number of users minus the total number of minutes of Downtime experienced by all users in a given calendar month, all divided by the total number of minutes in that calendar month multiplied by the total number of users.’

The monthly uptime percentage can be calculated with the following formula:
Monthly Uptime Percentage Formula
One thing to note is that the terms of the SLA are subject to change. The terms of the SLA will be fixed for the duration of the initial term of subscription. If a subscription is renewed, the version of the SLA that is current at the time of renewal will apply throughout the renewal term. You can always view the current version of the SLA at

When we see the statement ‘financially backed’ each of us might think something different. We might think of this as an insurance policy. If the services are unavailable for longer than Microsoft state in their SLA, I can claim back any ‘cost’ incurred as a result. This would be great, but it’s not the case.

The SLA states that ‘Service Credits are the Customer’s sole and exclusive financial remedy for any violation of this SLA’. Now that puts this into a different perspective. The customer is not able to claim back ‘costs’ incurred, like you would with a Cloud Insurance Policy, but the financial backing of the SLA offered by Microsoft is in the form of Service Credits.

The SLA also states that ‘The Service Credits awarded in any calendar month shall not, under any circumstance, exceed Customer’s monthly service fees’. So for example, if my business is utilising Office 365 and I pay £100 a month in service fees, in the case of a violation of this SLA, the maximum I could claim would be £100 of Service Credits. However, damages to my company due to the loss of service could be more like thousands or hundreds of thousands.

Microsoft has kindly provided a chart showing Monthly uptime percentage vs. Service Credit.
Monthly uptime percentage vs. Service Credit
Additionally, there are a number of cases outlined in the SLA provided by Microsoft that would mean that 99.9% uptime promise is not applicable, and therefore, not financially backed.

-      ‘Due to factors outside Microsoft’s reasonable control’
This vague statement is potentially huge, and open to interpretation. I read this as anything from an environmental disaster, to security threats, a terrorist attack or even a geographical power outage. I mean, if a freak storm blows away the data centre (that contained your email), this isn’t really within Microsoft’s reasonable control, is it?

-      ‘Resulted from Customer’s or third party hardware or software’
This one is fair enough and probably expected. If your operating system on your laptop crashes and therefore you cannot connect your Email client, you can hardly claim compensation from Microsoft. Or can you? Perhaps this is another debate, for another time.

-      ‘Resulted from actions or inactions of customers or third parties’
Again, fair enough. However, who do Microsoft regard as ‘thirds parties’? Are there third parties being used to provide certain services in the Microsoft data centre that you do not even know about?

-      ‘Caused by Customer’s use of Service after Microsoft advised to modify its use of the Service, if Customer did not modified its use as advised’
I think this statement is pretty straightforward and fair. You wouldn’t expect to be able to take legal action against a medical professional, if you didn’t take their advice, and the same applies here.

-      During scheduled downtime
This one made me chuckle. So, to be clear, Microsoft guarantees a 99.9% uptime, except for when declared ahead of time that the service is going to be down for maintenance.  The scary thing here is that there is nothing stopping Microsoft from saying they need to take the servers offline for an extended period of time to carry out maintenance.
Microsoft defines Scheduled Downtime as ‘(i) Downtime within pre-established maintenance windows or (ii) Downtime during major version upgrade’

-      ‘During beta and trial services (as determined by Microsoft)’
This is to be expected but maybe not all customers are aware of this.

Furthermore, the SLA states that ‘customers must adhere to any required configurations, use supported platforms and follow any policies for acceptable use found at in order to receive Service Credit’.

Microsoft has set such a high benchmark with their 99.9% uptime guarantee that no other provider can really compete; it really is the first guarantee of its kind on such a large scale offered by a cloud provider.

Many of the businesses that I have worked with using Office 365 have openly stated that the 99.9% financially backed uptime guarantee has been a factor in their decision to move to the cloud. Maybe they would reconsider if they knew the full details of the guarantee.

Using Service Credits as a financial remedy for violating the terms of the SLA is merely a token and does not replace Cloud Insurance. Cloud Insurance can help compensate for business that is lost while a cloud service in unavailable and provide the customer with financial protection in the event of loss of service.

The bottom line is that businesses considering the move to Office 365 should not take the guarantee offered by Microsoft at face value and should take the time to read the latest version of the SLA provided.
James HodgeManaging Director
Business IT Professional specialising in Consultancy, Business Relationship Management, Infrastructure Solutions and IT Project Management

Comments (3)

Thanks James_hodge - I was not aware of that .

In my experience of office 365 running the demo for 1 month I had at least 1 failure pr. week  in exchange connection - so I dont believe MS can live up to 99%.
And I was only counted those instances I noticed while working on my pc and while my internet was ok.
David AtkinTechnical Director
Top Expert 2015

Excellent Article, very informative.

Thank you
Very well articulated interpretation of the subject matter. An SLA is not always what it appears to be. Occasionally I feel SLAs are more of a product of marketing than engineering.

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