Welcome!

Cloud Expo Authors: Elizabeth White, Pat Romanski, Manuel Weiss, Richard Moulds, Martin Etmajer

Related Topics: Cloud Expo, SOA & WOA

Cloud Expo: 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

Cloud Expo Breaking News
Cloud Computing is evolving into a Big Three of Amazon Web Services, Google Cloud, and Microsoft Azure. Cloud 360: Multi-Cloud Bootcamp, being held Nov 4–5, 2014, in conjunction with 15th Cloud Expo in Santa Clara, CA, delivers a real-world demonstration of how to deploy and configure a scalable and available web application on all three platforms. The Cloud 360 Bootcamp, led by Janakiram MSV, an analyst with Gigaom Research, is the first bootcamp that introduces the core concepts of Infrastructure as a Service (IaaS) based on the workings of the Big Three platforms – Amazon EC2, Google Compute Engine, and Azure VMs. Bootcamp attendees will get to see the big picture and also receive the knowledge needed to make the best cloud decisions for their business applications and entire enterprise IT organization.
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
The Internet of Things is a natural complement to the cloud and related technologies such as Big Data, analytics, and mobility. In his session at Internet of @ThingsExpo, Joe Weinman will lay out four generic strategies – digital disciplines – to exploit emerging digital technologies for strategic advantage. Joe Weinman has held executive leadership positions at Bell Labs, AT&T, Hewlett-Packard, and Telx, in areas such as corporate strategy, business development, product management, operations, and R&D.
SYS-CON Events announced today that DevOps.com has been named “Media Sponsor” of SYS-CON's “DevOps Summit at Cloud Expo,” which will take place on June 10–12, 2014, at the Javits Center in New York City, New York. DevOps.com is where the world meets DevOps. It is the largest collection of original content relating to DevOps on the web today Featuring up-to-the-minute news, feature stories, blogs, bylined articles and more, DevOps.com is where the thought leaders of the DevOps movement make their ideas known.
There are 182 billion emails sent every day, generating a lot of data about how recipients and ISPs respond. Many marketers take a more-is-better approach to stats, preferring to have the ability to slice and dice their email lists based numerous arbitrary stats. However, fundamentally what really matters is whether or not sending an email to a particular recipient will generate value. Data Scientists can design high-level insights such as engagement prediction models and content clusters that allow marketers to cut through the noise and design their campaigns around strong, predictive signals, rather than arbitrary statistics. SendGrid sends up to half a billion emails a day for customers such as Pinterest and GitHub. All this email adds up to more text than produced in the entire twitterverse. We track events like clicks, opens and deliveries to help improve deliverability for our customers – adding up to over 50 billion useful events every month. While SendGrid data covers only abo...
SYS-CON Events announced today that the Web Host Industry Review has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Since 2000, The Web Host Industry Review has made a name for itself as the foremost authority of the Web hosting industry providing reliable, insightful and comprehensive news, reviews and resources to the hosting community. TheWHIR Blogs provides a community of expert industry perspectives. The Web Host Industry Review Magazine also offers a business-minded, issue-driven perspective of interest to executives and decision-makers. WHIR TV offers on demand web hosting video interviews and web hosting video features of the key persons and events of the web hosting industry. WHIR Events brings together like-minded hosting industry professionals and decision-makers in local communities. TheWHIR is an iNET Interactive property.
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurring their adoption by amplifying "faint signals" from the alpha geeks who are creating the future. An active participant in the technology community, the company has a long history of advocacy, meme-making, and evangelism.
SYS-CON Events announced today that Verizon has been named “Gold Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Verizon Enterprise Solutions creates global connections that generate growth, drive business innovation and move society forward. With industry-specific solutions and a full range of global wholesale offerings provided over the company's secure mobility, cloud, strategic networking and advanced communications platforms, Verizon Enterprise Solutions helps open new opportunities around the world for innovation, investment and business transformation. Visit verizonenterprise.com to learn more.
SYS-CON Events announced today that TMCnet has been named “Media Sponsor” of SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Technology Marketing Corporation (TMC) is the world's leading business to business and integrated marketing media company, servicing niche markets within the communications and technology industries.
"In my session I spoke about enterprise cloud analytics and how we can leverage analytics as a service," explained Ajay Budhraja, CTO at the Department of Justice, in this SYS-CON.tv interview at the 14th International Cloud Expo®, held June 10-12, 2014, at the Javits Center in New York City. Cloud Expo® 2014 Silicon Valley, November 4–6, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading Cloud industry players in the world.
“We are starting to see people move beyond the commodity cloud and enterprises need to start focusing on additional value added services in order to really drive their adoption," explained Jason Mondanaro, Director of Product Management at MetraTech, in this SYS-CON.tv interview at the 14th International Cloud Expo®, held June 10-12, 2014, at the Javits Center in New York City. Cloud Expo® 2014 Silicon Valley, November 4–6, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading Cloud industry players in the world.
"We are automated capacity control software, which basically looks at all the supply and demand and running a virtual cloud environment and does a deep analysis of that and says where should things go," explained Andrew Hillier, Co-founder & CTO of CiRBA, in this SYS-CON.tv interview at the 14th International Cloud Expo®, held June 10-12, 2014, at the Javits Center in New York City. Cloud Expo® 2014 Silicon Valley, November 4–6, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading Cloud industry players in the world.
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity. In his session at Internet of @ThingsExpo, Mac Devine, Distinguished Engineer at IBM, will discuss bringing these three elements together via Systems of Discover.
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at 15th Internet of @ThingsExpo, Chad Jones, Vice President, Product Strategy of LogMeIn's Xively IoT Platform, will show you how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
All too many discussions about DevOps conclude that the solution is an all-purpose player: developer and operations guru, complete with pager for round-the-clock duty. For most organizations that is not the way forward. In his session at DevOps Summit, Bernard Golden, Vice President of Strategy at ActiveState, will discuss how to achieve the agility and speed of end-to-end automation without requiring an organization stocked with Supermen and Superwomen.