Vendor lock in
Vendor lock-in is a situation that is created when a company is using a proprietary solution or technology from a specific provider, and this leads the customer to find that switching to another provider is very complicated and costly.
For its part, the provider makes sure to create dependency among its customers and with this it is extremely easy for them to retain them. Therefore, they develop customized solutions where the use of proprietary hardware and software may be implicit, so that if customers decide to switch to another company, that could generate a lot of costs.
1. Types of vendor lock-in
There are different types of vendor lock-in, among them the ones that we will most commonly find are the so-called: horizontal, vertical, diagonal and generational.
- Horizontal. It is the difficulty that is generated for changing a product or service for another similar offered by another company. The problems could vary, such as: training workers, penalties in case of cancellation, difficulty in allowing integration, etc.
- Vertical. Here is the strategy of “blocking” third-party solutions so that they cannot be integrated into the current ecosystem. Thus, the environment provided to the client restricts or reduces the options for other providers.
- Diagonal. Viewed from the customer’s perspective, their vision is to have everything under control from a single provider that offers them everything they need, at a fair and personalized price. At the same time, the provider has full control and can do almost anything without the customer’s consent.
- Generational. This is inevitable, since it is logical to think that customers will eventually have the feeling that there are better products or services, and will consider changing providers.
2. Tips to avoid vendor lock-in
Even when you are satisfied with the solutions offered by a provider, it is highly recommended to have alternatives in mind and thus avoid creating a dependency on their services/products. Here are some aspects that will make it as easy as possible for you to avoid falling into the trap of a vendor lock-in:
- Avoid proprietary systems. As far as possible, try to use open standards and free software, since this means that you don’t depend on a single provider.
- Pay attention to possible migrations. You should be especially interested in learning about the various channels and options for exporting the data you store in your current provider and how easy it would be to transfer it to another, for instance, if you work with Mailrelay email marketing, we provide an easy option for exporting your email lists.
- Primary and secondary provider. It would be better not to have all the solutions in a single provider, diversify and be prepared to always be ready for any contingency that forces you to convert the secondary provider into the primary one.
- Plan for the future. Most of the time, the problem has been not having a “plan B” or exit strategy, which allows us to disassociate ourselves from the company without this entailing a very complex problem. Therefore planning a possible change is vital.
- Work with heterogeneous services. It is a very interesting formula for not being tied to a single provider, this is achieved by diversifying the different business areas (having more than one provider for each of the vital areas of the company).
- It will also be necessary to keep in mind our own limitations. It is vital to keep in mind our limitations and the totality of infrastructures that we have. Only in this way can we implement the essentials of each provider for our business and avoid being forced to continue working with the same company when we know that there are better alternatives for our business.
- Review the conditions of the contract. To make sure you understand all the clauses and possible penalties, if any, for changing to other providers.