Vendor Lock In. Sorry, It Is Here to Stay
February 23, 2010
A happy quack to the reader who sent me a link to the Forbes Magazine story “The Future Of Enterprise Software.” The write up is one that says, “Yo, cloud computing is coming.” The suggestion is that vendors of enterprise software will no longer “lock in” a customer to a specific system.
Huh?
A commercial company has a mission: make money. One makes money by getting customers and keeping them. In the good old days of the mainframe, there was multi-point lock in. Today, the lock in is somewhat more subtle, but a bit like one of the country club prisoners that some wrong doers enjoy.
For me this passage triggered a chuckle:
Collectively these developments allow corporations to take a step back from software lock-in the way they stepped back from hardware lock-in during the mainframe era. IBM’s mainframes suffered more because of a concern over vendor lock-in than because of inefficiency or performance. And data outsourcing ended abruptly in the client/server era largely because companies were disgusted with service provider lock-in from companies like EDS.
In my experience, here is a run down of what some vendors are now doing:
First, there is the low cost play. Quite a few companies are moving down this path. The idea is to get the customer hooked and then play the “security” or “fear” card. The result is that the company will stick with a particular vendor to get the added value the company delivers. This is a “devil you know” approach.
Second, there is the open source play. Predicated on reducing license fees, most of the open source vendors sell services. Most organizations have at best a couple of wizards who can deal with open source. The rest will pay fees to have the open source experts manage the shop. Hey, it’s still money and it works just like the old lock in model but it has a “green” feel—responsible, natural, lower cost, etc.
Third, there is the cloud play. The idea is that an organization cannot afford or find top notch IT people. The cloud vendor can, so shove the software “out there” and enjoy the reduced costs.
Human nature loathes certain types of change. Once a vendor lands a customer, the vendor manages the customer relationship. The goal is lock in.
In my goose pond, lock in is the name of the game. It has to be because the cost of customer acquisition is too high. The whole point of selling software, systems and services is lock in. Just my opinion, Mr. Forbes.
Stephen E Arnold, February 23, 2010
No one paid me to write this. Because I mentioned lock in, I will report non payment to the General Accountability Office, an outfit that rides herd on vendors who work hard to lock in the Federal government and some succeed pretty darn regularly.
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