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What is "Vendor Lock-in"?

“Rather than comparing war to art we could more accurately compare it to commerce, which is also a conflict of human interests and activities; and it is still closer to politics, which in turn may be considered as a kind of commerce on a larger scale.” - Carl Von Clausewitz, in On War, Book I, Chapter 3.

Vendor lock-in, also known as proprietary lock-in or customer lock-in, makes a customer dependent on a specific supplier (vendor) for products and services, unable to use another vendor without substantial switching costs.

No consumers of computer software and hardware ought be hoodwinked into thinking that the great computer companies of the world have altruistic motives when dealing with their customers. Customers are the lifeblood of every company. They consume the products on offer and in return provide the supplying companies with handsome revenue and the company's stockholders with handsome dividends. Companies must fight tooth-and-nail to gain customers and just as hard to retain them. How they do this is sometimes unethical, and in certain jurisdictions, illegal.

At this moment, the giants of the art of vendor lock-in are Microsoft Corportation and Apple Corporation, though many other companies in may other fields also attempt to emulate lock-in strategies, with varying degrees of success.

Of course on the other side, consumers are driven by their own self-serving interests. They usually see no reason to offer an existing vendor their loyalty. It is where the two competing, self-serving interests meet that a 'state of war' exists.

There is nothing wrong with this scenario if both protagonists of the contest are on equal footing. However that is rarely the case. Certainly a single product user has almost no influence on the relationship between them and the supplier company. In fact, short of the User Support Centre/Helpline, a solitary user has no effective means to communicate or deal with their vendor. However, when the user is a large corporation or a government department the scales become more evenly balanced and in the case of government organisations actually tip in favour of the user as has been seen in Europe where various governments within the European Union have ruled against the interests of software suppliers. At least it appears that way on the surface.

Within every software and hardware company, significant efforts are applied to finding methods of locking customers into the particular vendor's solutions. Various proprietary methods are designed to make it as painful as possible for a user to switch to a competitor. Often this is done by offering users a suite of products that address all their various business needs. In this case, switching to another product has in-built barriers to such a move. What may be conveniently acceptable to management and administration may be less so for finance departments, factory and warehouse inventory management and other company areas. The current vendor hopes that a captured customer will just give up on considering a change of vendor.

In spite of the fact that the vendor solution may be a relatively good one technically, at least at the beginning, a question must be asked. Is it in the customer's interest to be forced in to accepting to stay with a problematic vendor solution because moving to a better solution has a substantial and possibly prohibitive cost actually engineered by the current vendor? The answer is no.

In this scenario, open source solutions provide a much better outcome. The organisations that provides such solutions have no vested interest in locking a customer into their solutions. There is no profit motive attached. There are no shareholders to satisfy. Open source suppliers are driven by far different motivations. The programmers and engineers working on such solutions, while undoubtedly motivated by their own needs; for recognition, advancement, even glory; eventually come together to provide only one thing, a superior product. Open source organisations can easily accommodate unique customer needs because the option is open to customers to add their own code to the open source library which they are not obligated to share except by their own decision.

See also Vendor lock-in.