The Vendor lock-in business model has been around for years. We see it from time to time with our prospects and customers. The advantages to the vendor are obvious—customers need to jump hoops just to switch to a new vendor, making their current system look more appealing simply for the immediate convenience. But for the customer, reality soon sets in that the short-term convenience isn’t worth the long-term commitment. Your one-sided partnership has been set up to fail!
In the software domain, the consequences of this business model are often even worse. Proprietary formats or databases hold customer data hostage. The lock-in vendor’s software is the only way to view your infrastructure, equipment and customer information. Recently, customers opposing this model have demanded application openness and adherence to standards, but you can bet the lock-in vendor will counter these benefits with tenuous promises of greater functionality.
But there’s good news: YOU, the customer, can insist on openness, standards and integration, knowing you’ll get the same or better functionality. You’ll certainly gain greater flexibility and value from being in control of your own data.
So how do you recognize vendors that have a lock-in model? The majority of vendors don’t necessarily share that you will be giving up benefits your organization enjoys when you purchase their software, but here are three signs you may be in for trouble:
- 1. The vendor is unwilling to integrate with other software packages. They may insist that instead of integrating with a third-party software, you replace it with a package they offer. Nothing will slow a project down more than unexpectedly replacing a working system with a new one that provides little to no increased functionality. Modern APIs and standards mean the technical excuses for this model are no longer valid.
- 2. The vendor insists on changing your systems and processes to suit their software functionality.There’s a reason your organization works the way it does, and while there are sometimes valid reasons to change (think increased efficiency, increased quality of service, better teamwork, etc.), the change will not stick if your organization’s priorities are not the incentive.
- 3. The vendor demands data gathering and data retention changes. Data is one of the most valuable assets for information technology companies. The vendor should make a strong case for changes to data gathering processes and data storage policies before you hand over any kind of control over data.
These red flags will prevent you from investing in a vendor that doesn’t truly have your needs in mind. But what if you’ve already invested in a lock-in vendor? Be on the lookout next week for our advice on making some changes!