The concept of vendor lock-in is as old as IT itself. It is, in fact, the most significant drawbacks of cloud computing. It is a situation in which the customer using a specific product or service is unable to switch to a competitor’s product or service. It is also known as proprietary lock-in or customer lock-in. Keep reading this blog for relevant insights.
Vendor lock-in is the limited use of technology, service or solution developed by a vendor or a vendor partner. In this situation, customers aren’t allowed to switch to alternate vendors. The primary purpose of this technique is to ensure the customer’s dependence on vendor services. The situation arises due to the development of IT solutions that are platform dependent and run collaboratively or exclusively with third-party vendor partners.
The vendor lock-in reduces high switching costs between competing vendors. Thus, customers are even more reluctant to switch to different vendors. Vendor lock-in leads to monopolies in the market. Monopolies, in turn, maintain their dominant position, thereby making it difficult for potential rivals to enter the market.
A restricted situation is usually the result of proprietary technologies that are incompatible with those of the competitors. Contract constraints or inefficient processes may also lead to this scenario.
Vendor lock-in is considered as one of the major drawbacks of cloud service adoption. Cloud service migration indicates that a customer needs to stay with a provider even if it fails to meet the needs. In order to move data from one provider to another, one needs to move the data back to the client’s site and then move it to the new provider’s environment.
Sounds confusing, right? Check out this example for clarity.
Many of you must have faced the consequences of getting your SIM card locked. In this case, the SIM card is proprietary to a specific phone number. As mentioned above, vendor lock-in is usually seen in cloud computing solutions. Thus, the switching of services or data from one platform to another is quite complex.
In Economics, vendor lock-in is also known as customer lock-in or proprietary lock-in. It makes the customer dependent on a vendor for specific products and services. Due to this technique, you can’t use another vendor. In case you do, you may have to pay high switching costs. These costs create a barrier to market entries. There are various types of vendor lock-in techniques. Check out each of them.
This case of lock-in occurs when a single vendor controls the market, or they use high-end technology to lock the customers. It is potentially challenging to overcome if the monopoly is held up by the barriers to the market. Some of the common barriers include patents, cryptography, secrecy, etc.
This variant is based on the idea that the more the society adopts a certain technology, the more unlikely they are going to switch. You can take the example of the QWERTY keyboard as the cause of technological lock-in. Similarly, carbon lock-in is also a consequence of technological lock-in. This makes people rely on carbon-intensive technologies and hinders the commercialisation of renewable energy.
This is considered as the weakest form of vendor lock-in technique. For example, if someone has become proficient in using QWERTY keyboards, the chances are high that he/she will continue using the same keyboard with incentives. Similarly, if most of your multimedia equipment is interconnected with HDMI, you will seek HDMI compatibility to all other multimedia-capable equipment.
The cases of vendor lock-in are mostly visible in the cloud computing solutions. There are 3 main types of cloud lock-in.
Cloud vendors develop their services on particular visualisation platforms such as VMware and Xen. The thing about virtualisation is that it allows you to use resources from a centralised task administration. You need to manage any software or hardware on your own.
When you use a particular cloud solution, you tend to store all your data in it. What if you want to change the cloud provider? Will the data switch provider on its own? You may have to execute a toilsome process to transfer all your data to the cloud provider you want to work on. Apart from the laborious process, it is also quite risky.
Different cloud vendors offer different kinds of tools to the customers. There may be cloud provisioning and monitoring tools for users to manage their data. In the case of tools lock-in, the tools might not be compatible with other platforms. Hence, using a new cloud platform can be difficult for you.
No matter which type of cloud lock-in you are facing, it can surpass security risk as the biggest obstacle in cloud computing. All types of cloud lock-in make a customer completely dependent on the vendor for products and services. You may be able to switch to other service providers, only at the cost of high switching charges.
Would you like to opt for the services if you have no alternative options? Wouldn’t it make you feel helpless with no power to switch to another service provider as per your necessity? You can find yourself in the same situation as mentioned above in cloud lock-in scenarios. Most of the decision makers are concerned about being locked into a cloud platform with a clear exit strategy.
Isn’t there even a tiny good thing about the vendor lock-in technique? Vendor lock-in has limited good effects on certain industries. For instance,
In the industry of software architecture or all forms of designs, most of the decisions are made on the basis of trade-offs. No decision is zero-sum. However, vendor lock-in is not really a problem if it comes with an exit option. Vendors, these days, bring along new innovative ways to fix this issue.
Amazon developed massive scale storage in S3 with a proprietary API in order to consume the services. Similarly, Salesforce brought forth a new market in cloud CRM with entirely different proprietary tools and language constructs. Also, Azure invented the rule of a managed platform
In the field of digital marketing, it is crucial for the businessmen to meet those ‘standards’ and provide an exit strategy for the vendor lock-in. In an attempt to do so, you may get locked into an eco-system. You can view this effect especially on browsers. Usually, vendors adopt the latest HTML standard and add their own browser features to extend the standard. When sites use these features, they automatically get locked into the browser.
The fact is that every vendor has a specific agenda. To prevent yourself from falling into the trap of that agenda, you need to understand the vendor’s business models. For instance, Google sells advertising. Facebook sells you. Apple sells hardware and Amazon sells content. They design lock-in techniques on the basis of what is important to them commercially. Capitalism at work is similar to the consequences of bad lock-in.
The ugly lock-in technique is regulated by the vendor agenda. It usually involves the vendor changing terms and conditions to force a third party to remove something. It can also involve the removal of support for something that the vendor previously supported.
Consider the example of Google which attempted to remove support of the H.264 video codec from Chrome. This step was taken to promote its own WebM codec. Similarly, Apple changed the terms and conditions of its iOS App Store to remove in-app purchases that bypass the store. This determines that the Kindle store button of Amazon had to be removed from the app.
These are some of the most popular effects of vendor lock-in. You can see the effects mostly in the field of cloud computing. As mentioned before, vendor lock-in is not bad if it has an exit strategy. Now check out the impact of vendor lock-in on cloud computing.
Vendor lock-in puts all your data, infrastructure and applications at stake with one cloud provider. You must be wondering if this situation is avoidable at a cost. However, you may not be able to abandon the risks of vendor lock-in completely. Here are the measures that can help you minimise the risks to a great extent.
Before selecting your CSP, make sure it has everything that you need to run your applications smoothly. Consider all the features offered by the CSP to see if they suit your needs. Check out the different prices to determine the most affordable option. Understand their service level agreements and data transfer costs before choosing the CSP.
You can avoid proprietary formatting to maximise the portability of your data. Use applicable scheme standards to describe data models as clearly as possible. Make sure that your cloud provider offers a way for you to extract data economically. This step can help you prevent data lock-in on your cloud provider.
It may sound weird initially. However, you must plan for an exit even before signing up for your cloud service provider. This can help you protect your company in case things go amiss. Include your exit plans and potential costs as a part of the implementation strategy. Also, it is better not to plan out for more than a couple of years. In case you do, you may not be able to migrate to another cloud provider.
When a cloud service provider houses your application and data, issues are bound to arise. To mitigate cloud vendor lock-in, try out the methods mentioned above. You can also build a loosely coupled application or consider a multi-cloud strategy. Click here to know more about cloud computing and vendor lock-in.
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