An SLO turns “reliable enough” into a number the team can track. It is set from what users need, not from what the system happens to do today, and is usually stricter than any SLA, so there is room to react before customers are owed credits.
The gap between the SLO and 100% is the error budget. While budget is left, the team can ship changes and take risks; when it runs out, work shifts to reliability until the window recovers. That makes reliability a shared decision between product and engineering.
Good SLOs are few, tied to what users notice, such as the availability of checkout or the latency of the API, and measured over a rolling window, often 28 or 30 days.
Formula
Error budget = (100% − SLO) × window
Example:
A 99.9% SLO over 30 days leaves an error budget of 43 minutes and 12 seconds; 99.95% leaves 21 minutes and 36 seconds.