Welcome!

@CloudExpo Authors: Mike Raia, Dana Gardner, Elizabeth White, Pat Romanski, William Schmarzo

Related Topics: @CloudExpo, Microservices Expo

@CloudExpo: Blog Feed Post

Vendor Lock-in and Cloud Computing

Does lock-in simply come with the territory or can it be avoided?

IT vendor lock-in is as old as the IT industry itself. Some may even argue that lock-in is unavoidable when using any IT solution, regardless of whether we use it “on premise” or “as a service”. To determine whether this is the case, we examine traditional lock-in and the to-be-expected impact of cloud computing.

Vendor lock-in is seen as one of the potential drawbacks of cloud computing. One of Gartner’s research analysts recently published a scenario where lock-in and standards even surpass security as the biggest objection to cloud computing. Despite efforts like Open Systems and Java, we have managed to get ourselves locked-in with every technology generation so far. Will the cloud be different or is lock-in just a fact of live we need to live with? Wikipedia defines vendor lock-in as:

In economics, vendor lock-in, also known as proprietary lock-in, or customer lock-in, makes a customer dependent on a vendor for products and services, unable to use another vendor without substantial switching costs. Lock-in costs which create barriers to market entry may result in antitrust action against a monopoly.

Let’s examine what lock-in means in practical terms when using IT solutions and how cloud computing would make this worse or better. For this we look at four dimensions of lock-in:

Horizontal lock-in: This restricts the ability to replace a product with a comparable or competitive product. If I choose solution A (let’s for example take a CRM solution or a development platform), then I will need to migrate my data and/or code, retrain my users and rebuild the integrations to my other solutions if I want to move to solution B. This is a bit like when I buy a Prius, I cannot drive a Volt. But it would be nice if I can use the same garage, loading cable, GPS, etc. when I switch.

Vertical lock-in: This restricts choice in other levels of the stack and occurs if choosing solution A mandates use of database X, operating system Y, hardware vendor Z and/or implementation partner S. To prevent this type of lock-in the industry embraced the idea of open systems, where hardware, middleware and operating systems could be chosen more independently. Before this time hardware vendors often sold specific solutions (like CRM or banking) that only ran on their specific hardware / OS etc. and could only be obtained in their entirety from them. So a bit like today’s (early market) SaaS offerings, where all needs to be obtained from one vendor.

Diagonal (of inclined) Lock-in: This is a tendency of companies to buy as many applications as possible from one provider, even if his solutions in those areas are less desirable. Companies picked a single vendor to make management, training and especially integration easier but also to be able to demand higher discounts. A trend that let to large, powerful vendors, which caused again higher degrees of lock-in. For now we call this voluntary form of lock-in diagonal Lock-in (although “inclined”- a synonym for diagonal - may describe this better).

Generational Lock-in: This last one is as inescapable as death and taxes and is an issue even if there is no desire to avoid horizontal, vertical or diagonal lock-in. No technology generation and thus no IT solution or IT platform lives forever (well, maybe with exception of the mainframe). The first three types of lock-in are not too bad if you had a good crystal ball and picked the right platforms (eg. Windows and not OS/2) and the right solution vendors (generally the ones that turned out to become the market leaders). But even such market leaders at some point reach end of life. Customers want to be able to replace them with the next generation of technology without it being prohibitively expensive or even impossible because of technical, contractual or practical lock-in.

The impact of cloud computing on lock-in
How does cloud computing, with incarnations like SaaS (software as a service), PaaS (platform as a service) and IaaS (infrastructure as a service) impact the above? In the consumer market we see people using a variety of cloud services from different vendors , for example Flickr to share pictures, Gmail to read email, Microsoft to chat, Twitter to Tweet and Facebook to … (well, what do they do on Facebook?), all seemingly without any lock-in issues. Many of these consumer solutions now even offer integration amongst each other. Based on this one might expect that using IT solutions “as a service” in an enterprise context also leads to less lock-in. But is this the case?

Horizontal: For the average enterprise moving from one SaaS solution to another is not so different from moving from a traditional software application to another, provided they agreed whether and how their data can be transferred. What does help is that SaaS in general seems easier and faster to implement and that it is not necessary for the company to have two sets of infrastructure available when migrating.


For PaaS it is a very different situation, especially if the development language is proprietary to the PaaS platform. In that case, the lock-in is almost absolute and comparable to the lock-in companies may have experienced with proprietary 4GL platforms, with the added complexity that with PaaS also the underlying infrastructure is locked-in (see under vertical).

Horizontal lock-in for IaaS may actually be less severe than lock-in to traditional hardware vendors as virtualization - typical for any modern IaaS implementation - isolates from underlying hardware differences. Provided customers do not lock themselves in to a particular hypervisor vendor, they should be able to move their workloads relatively easy between IaaS providers (hosting companies) and/or internal infrastructure. A requirement for this is that the virtual images can be easily converted and carried across, a capability that several independent infrastructure management solutions now offer. Even better would be an ability to move full composite applications (more about this in another post).

Vertical: For SaaS and PaaS vertical lock-in is almost by definition part of the package as the underlying infrastructure comes with the service. The good news is the customer does not have to worry about these underlying layers. The bad news is that if the customer is worried about the underlying layers, there is nothing he can do. If the provider uses exotic databases, dodgy hardware or has his datacenter in less desirable countries, all the customer can do is decide not to pick that provider. He could consider contracting upfront for exceptions, but this will in almost all case will increase the cost considerably, as massive scale and standardization are essential to business model of real SaaS providers.

On the IaaS side we see less vertical lock-in, simply because we are already at a lower level, but ideally our choice of IaaS server provider should not limit our choice of IaaS network or IaaS storage provider. For storage the lesson we learned the hard way during the client server area –for enterprise applications logic and data need to be close together to get any decent performance – still applies. As a result the storage service almost always needs to be procured from the same IaaS provider as used for processing. On the network side most IaaS providers offer a choice of network providers, as they have their datacenter connected to several network providers (either at their own location or at one of the large co-locators).

Diagonal or inclined: The tendency to buy as much as possible from one vendor may be even stronger in the cloud than in traditional IT. Enterprise customers try to find as single SaaS shop for as many applications as possible. Apart from the desire for out of the box integration, an - often overlooked - reason for this is that customers need to regularly audit the delivery infrastructure and processes of their current SaaS providers, something which is simply unfeasible if they would end up having hundreds of SaaS vendors.

For similar reasons we see customers wanting to buy PaaS from their selected SaaS or IaaS vendor. As a result vendors are trying to deliver all flavors, whether they are any good in that area or not. A recent example being the statement from a senior Microsoft official that Azure and Amazon were likely to become more similar, with the first offering IaaS and the second likely to offer some form of PaaS soon.

In my personal view, it is questionable whether such vertical cloud integration should be considered desirable. The beauty of the cloud is that companies can focus on what they are good at and do that very well. For one company this may be CRM, for another it is financial management or creating development environments and for a third it may be selling books - um, strike that - hosting large infrastructures. Customers should be able to buy from the best, in each area. CFOs do not want to buy general ledgers from CRM specialists, and for sure sales people don’t want it the other way around. Similar considerations apply for buying infrastructure services from a software company or software from an infrastructure hosting company. At the very least this is because developers and operators are different types of people, which no amount of “devops training “ will change (at least not during this generation).

Generational: As with any new technology generation people seem to feel this may be the final one: “Once we moved everything to the cloud, we will never move again.” Empirically this is very unlikely - there always is a next generation, we just don’t know what it is (if we did, we would try and move to it now). The underlying thought may be: “Let the cloud vendors innovate their underlying layers, without bothering us”. But vendor lock-in would be exactly what would prevent customers from reaping the benefits of clouds suppliers innovating their underlying layers. Let’s face it, not all current cloud providers will be innovative market leaders in the future. If we were unlucky and picked the wrong ones, the last thing we want to be is locked-in. In today’s market picking winning stocks or lotto numbers may be easier then picking winning cloud vendors (and even at stock picking we are regularly beaten by not very academically skilled monkeys).

Conclusion
My goal for this post was to try and define lock-in, understand it in a cloud context and agree that it should be avoided while we still have a chance (while 99% of all business systems are not yet running in the cloud). Large scale vertical integration is typical for immature markets – be it early-day cars or computers or now clouds. As markets mature companies specialize again on their core competencies and find their proper (and profitable) place in a larger supply chain. The lock-in table at the end, where I use the number of padlocks to indicate relative locking of traditional IT versus SaaS, PaaS and IaaS, is more meant for discussion and improvement than as an absolute statement. In fact our goal should be to reduce lock-in considerably for these new platforms. In a later post I will discuss some innovative cross cloud portability strategies to prevent lock-in when moving large numbers of solutions into the cloud, stay tuned.

PS Not that I for a minute think my blogs have any serious stopping power, but do not let the above stop you from moving suitable applications into the cloud today. It’s a learning experience that we will all need as this cloud thing gets serious for serious enterprise IT (and I am absolutely sure it will, as the percentage of suitable applications is becoming larger every day). Just make sure you define an exit strategy for each first, as all the industry analysts will tell you. In fact, even for traditional IT it always was a good idea to have an exit strategy first (you did not really think these analysts came up with something new, did you?).

This blog originally was published at ITSMportal.com on July 14, 2010

More Stories By Gregor Petri

Gregor Petri is a regular expert or keynote speaker at industry events throughout Europe and wrote the cloud primer “Shedding Light on Cloud Computing”. He was also a columnist at ITSM Portal, contributing author to the Dutch “Over Cloud Computing” book, member of the Computable expert panel and his LeanITmanager blog is syndicated across many sites worldwide. Gregor was named by Cloud Computing Journal as one of The Top 100 Bloggers on Cloud Computing.

Follow him on Twitter @GregorPetri or read his blog at blog.gregorpetri.com

@CloudExpo Stories
Fact: storage performance problems have only gotten more complicated, as applications not only have become largely virtualized, but also have moved to cloud-based infrastructures. Storage performance in virtualized environments isn’t just about IOPS anymore. Instead, you need to guarantee performance for individual VMs, helping applications maintain performance as the number of VMs continues to go up in real time. In his session at Cloud Expo, Dhiraj Sehgal, Product and Marketing at Tintri, wil...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
Qosmos has announced new milestones in the detection of encrypted traffic and in protocol signature coverage. Qosmos latest software can accurately classify traffic encrypted with SSL/TLS (e.g., Google, Facebook, WhatsApp), P2P traffic (e.g., BitTorrent, MuTorrent, Vuze), and Skype, while preserving the privacy of communication content. These new classification techniques mean that traffic optimization, policy enforcement, and user experience are largely unaffected by encryption. In respect wit...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Enterprises have forever faced challenges surrounding the sharing of their intellectual property. Emerging cloud adoption has made it more compelling for enterprises to digitize their content, making them available over a wide variety of devices across the Internet. In his session at 19th Cloud Expo, Santosh Ahuja, Director of Architecture at Impiger Technologies, will introduce various mechanisms provided by cloud service providers today to manage and share digital content in a secure manner....
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
To leverage Continuous Delivery, enterprises must consider impacts that span functional silos, as well as applications that touch older, slower moving components. Managing the many dependencies can cause slowdowns. See how to achieve continuous delivery in the enterprise.
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
SYS-CON Events announced today Telecom Reseller has been named “Media Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
DevOps at Cloud Expo – being held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Am...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
SYS-CON Events announced today that eCube Systems, a leading provider of middleware modernization, integration, and management solutions, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. eCube Systems offers a family of middleware evolution products and services that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...