Bill shocks, exits and official sources
Hosting outages: SLA uptime, service credits and what the Australian Consumer Law may add
What 99.9% uptime means in minutes, how service credits are calculated and claimed, why they rarely cover your loss, and how consumer guarantees and your own design fill the gap.
A hosting service level agreement (SLA) promises a level of availability, such as 99.9% a month, and usually offers service credits (a percentage off your bill) if the provider misses it. Credits are normally capped, must be claimed within a deadline, and exclude many causes, so they rarely come close to the cost of an outage to your business. The Australian Consumer Law guarantees that services are supplied with due care and skill, and these guarantees can apply to business buyers in some cases, but how they apply to a hosting outage depends on the facts and the contract. Your best protection is design: backups you control, a tested restore, and, where the business case supports it, redundancy across zones or providers.
This guide belongs to the section overview, why cloud bills blow out. It links to hosting contract terms, exit costs and lock-in and official sources. This is general information, not legal advice.
What uptime percentages mean in practice
Using an average month of 730 hours:
| Availability | Allowed downtime a month | Allowed downtime a year |
|---|---|---|
| 99.0% | 7.3 hours | 87.6 hours |
| 99.5% | 3.65 hours | 43.8 hours |
| 99.9% | 43.8 minutes | 8.76 hours |
| 99.95% | 21.9 minutes | 4.38 hours |
| 99.99% | 4.4 minutes | 52.6 minutes |
The SLA applies to what the provider defines: often a single service in a single region, measured the provider's way, excluding scheduled maintenance, your own misconfiguration, attacks, and events outside the provider's control. Some cloud SLAs apply only if you run across more than one availability zone.
How service credits work
A typical SLA (illustrative, not any provider's terms):
| Monthly availability | Credit |
|---|---|
| Below 99.9% but at least 99.0% | 10% of the monthly charge for the affected service |
| Below 99.0% but at least 95.0% | 25% |
| Below 95.0% | 100% |
Illustrative outage: a web server and database run on a service costing $800 a month. A five-hour outage brings availability to (730 − 5) ÷ 730 = 99.32%. The credit is 10%: $80, applied to a future bill if you claim it within the deadline. The business estimates lost bookings and staff time at $3,000. The credit covers under 3% of the loss.
Credits commonly:
- must be requested within a set period (for example 30 days) with evidence;
- apply only to the affected service, not your whole bill;
- are capped (often at the monthly fee);
- are the "sole and exclusive remedy" for availability failures under the contract.
What the Australian Consumer Law may add
The consumer guarantees for services require services to be supplied with due care and skill, to be fit for any purpose you made known, and to be supplied within a reasonable time where no time is agreed. They can apply to business buyers, for example where the price of the services is $100,000 or less. For services not ordinarily acquired for personal, domestic or household use, a contract term may limit the supplier's liability for a failure to supplying the services again or paying the cost of having them supplied again (ACL s 64A), unless you show that relying on that limit is not fair or reasonable.
How this applies to a hosting outage is genuinely uncertain and depends on the facts: what caused it, what was promised, and the contract. An outage is not automatically a breach of due care and skill. Overseas providers' terms often seek to exclude Australian law; whether that is effective is a legal question. Treat the consumer guarantees as a possible backstop and get advice for a significant loss. The ACCC explains the guarantees; your state small business commissioner can help with a dispute.
Design is the real protection
| Measure | What it protects against | Illustrative extra cost |
|---|---|---|
| Backups outside the hosting account | Data loss, account lock-out, provider failure | Storage plus egress |
| Tested restore procedure | Discovering backups do not work during an outage | A few hours a year |
| Second availability zone | Failure of one data centre | Roughly doubles the servers you run for that role |
| Second region (e.g. Sydney and Melbourne) | Region-wide outage | Extra servers or standby plus inter-region transfer |
| Status page and alert subscriptions | Slow awareness of incidents | Free |
| Business continuity plan | Staff not knowing what to do | Time to write and rehearse |
Compare the extra cost with the cost of downtime. For a brochure site, a few hours' outage may be acceptable and backups enough. For an online shop taking orders every hour, a second zone may pay for itself.
Illustrative: if an hour of downtime costs $600 and a second zone adds $250 a month ($3,000 a year), it is worth it if it prevents more than five hours of downtime a year.
After an outage: a short checklist
- Record start and end times, symptoms and the provider's status page notices.
- Claim service credits within the deadline, with evidence.
- Ask the provider for its incident report.
- Check whether any personal information was affected; if a breach is likely to cause serious harm, the Notifiable Data Breaches scheme applies.
- Review your design and backups: what would have reduced the impact?
Frequently asked questions
Is 100% uptime possible?
No provider guarantees it in practice. Higher availability comes from your design across zones or providers, at extra cost.
Does shared hosting have an SLA?
Many shared plans state an uptime target with credits. Read the definitions and the claim process.
Can I claim lost profits from my host?
Most hosting terms exclude lost profits and cap liability. Whether those terms are effective depends on the contract and the law; get legal advice for a significant loss.
Who can help with a dispute about an outage?
Start with the provider in writing. The ASBFEO and state small business commissioners can help small businesses with disputes.
Sources
- Australian Competition and Consumer Commission — consumer guarantees for services, including purchases by businesses
- Australian Small Business and Family Enterprise Ombudsman — dispute support for small businesses
- Office of the Australian Information Commissioner — Notifiable Data Breaches scheme
- Australian Cyber Security Centre (ASD) — business continuity and backup guidance
- Federal Register of Legislation — Competition and Consumer Act 2010, Schedule 2 (Australian Consumer Law)
