Vendor Lock-In

What is Vendor Lock-In? Security Expert Bruce Schneier writes:

“Lock-in” is an economic term for the difficulty of switching to a competing product. For some products — cola, for example — there’s no lock-in. I can drink a Coke today and a Pepsi tomorrow: no big deal. But for other products, it’s harder.

Switching word processors, for example, requires installing a new application, learning a new interface and a new set of commands, converting all the files (which may not convert cleanly) and custom software (which will certainly require rewriting), and possibly even buying new hardware. If Coke stops satisfying me for even a moment, I’ll switch

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Lock-in isn’t new. It’s why all gaming-console manufacturers make sure that their game cartridges don’t work on any other console, and how they can price the consoles at a loss and make the profit up by selling games. It’s why Microsoft never wants to open up its file formats so other applications can read them. It’s why music purchased from Apple for your iPod won’t work on other brands of music players. It’s why every U.S. cellphone company fought against phone number portability. It’s why Facebook sues any company that tries to scrape its data and put it on a competing website. It explains airline frequent flyer programs, supermarket affinity cards and the new My Coke Rewards program.

With enough lock-in, a company can protect its market share even as it reduces customer service, raises prices, refuses to innovate and otherwise abuses its customer base. It should be no surprise that this sounds like pretty much every experience you’ve had with IT companies: Once the industry discovered lock-in, everyone started figuring out how to get as much of it as they can.