I get SLAs now. Duh.
Ok, so I guess I’m a total n00b. In hindsight, SLAs make a lot of sense after all. The whole point isn’t to compensate SmugMug for our loss, it’s to make it unprofitable for the service provider to keep making the same mistakes.
In other words, let’s say Amazon’s margins on S3 are 15%. (I have no data, I’m just picking that number out of the air). If Amazon has a serious problem during a month, they have to cough up 25% to all their customers. In other words, they lose 10% instead of make 15%.
That’s pretty major incentive – and it now totally makes sense why SLAs are so highly valued.