Vendor Lock-in: Is it a real concern?


For an IT geek, I’ve been in more than my fair share of senior management meetings. I’ve enjoyed the role as arbitrator between IT and the business. I can tell you one thing; I’ve never heard a business owner ask, “It’s that solution that all our competitors use from vendor x proprietary?” A solution being open or proprietary has never been on the list of business requirements.

I understand the risks of lock-in. Just ask any Oracle customer how they feel about the big check they pay Oracle or SAP every year. Also, look at the alternative – Building your own or customizing an open source solution. There’s a reason why companies such as Microsoft, Oracle, Cisco and VMware have dominant market positions. Business owners decided a long time ago that developing technology in-house is not worth the time and effort.

These technology companies are experts at building software that meets 80% of the needs of most users. What about the other 20%? IT shops can decide to go with custom or open source and build the additional 20% capability needed to meet the business requirements but at what cost and risk?

Building secure and stable software that meets the needs of the business is difficult work that requires specialized skill. It’s also no slam dunk that an internal team can execute any better on the development than a traditional vendor. For companies such as Facebook, Google and Netflix that can leverage open source by adding internal programming muscle, it does pay off. But technology is a core part of these businesses. If technology isn’t already a core part of an organization’s business does it make sense to avoid proprietary solutions to just avoid lock-in? Many companies that are concerned by the risk of third party products and services find that continuous monitoring is the best way to ensure that vendor risks are constantly being accounted for. You can find out more about continuous monitoring over at https://www.aravo.com/capabilities/continuous-monitoring/ if this is something that would help your organization fight against third party vendor risks.

Customized software can be a compelling option if you are confident that it creates a competitive advantage, and you can execute on the project. Otherwise, vendor lock-in shouldn’t be a concern just as long as the vendor is healthy and continues to meet your needs.

Published by Keith Townsend

Now I'm @CTOAdvisor

4 thoughts on “Vendor Lock-in: Is it a real concern?

  1. I’ve seen what you’re talking about with the 20%. In this case, the software did the other 20% but it was an additional license. They decided to build that software internally. Of course, it had to do the other 80% first, THEN do the other 20%. Five years later, we’re now paying for both and there’s no more budget to develop the last 5% or so. We could have had what we needed 5 years ago if allocations had moved from salary/software dev -> licenses.

  2. I would agree for the traditional IT Service delivery model, but Cloud Operations is a different beast. Agility IS one of the business drivers in ITaaS, and vendor lock-in is a direct hindrance to that, especially if you are trying to move to an Infrastructure as a Service model.

    1. I guess it depends on what you mean by agility. I think Web 2.0 companies that built their applications on AWS would argue while they are locked in to AWS they are still agile.

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