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What is Vendor Lock-in and How Can I Avoid It?

By: Blair Felter on May 22, 2019

With cloud computing becoming more accessible than ever before, many companies have jumped at the opportunity to unburden themselves from the demands of maintaining their own IT infrastructure and software platforms. While the public cloud offers a number of crucial advantages for businesses, allowing them to scale operations quickly and utilize enterprise-grade services without making enterprise-level capital investments, companies must be wary about vendor lock-in and how it could constrain their flexibility in the future.

What is Vendor Lock-In?

Vendor lock-in occurs when a company becomes constrained due to its overreliance upon a service provided by a single vendor. While the company could technically leave the vendor, the costs of doing so are too high for it to bear. Smaller organizations are particularly vulnerable to vendor lock-in because they often enter into a “one-size-fits-all” cloud solution that made sense for them when they were starting out, but may no longer suit their needs following a period of growth.

There are a few steps companies can take to avoid vendor lock-in and retain the flexibility they need to succeed as they grow:

Evaluate the Vendor’s Exit Terms Carefully

When entering into an agreement with any cloud provider, it’s critical to scrutinize their terms of service and SLA to understand how they handle data and application migration. This is less for the technicalities of that migration process and more for the legal and financial obligations. Migrating key assets to the cloud can often be done quite easily through lift and shift strategies, but getting them out again might not be so easy. Many cloud providers charge a fee when customers migrate data and other applications out of the cloud. Even if a company envisions remaining with a vendor for a long time, it’s good to determine just how much it will cost in terms of money and time to migrate to another vendor. This will make it possible to plan for an exit if priorities shift or, in a worst-case scenario, the vendor suddenly goes out of business.

Build a Best of Breed Multi-Cloud

While relying upon a single vendor for a variety of services certainly has appeal in terms of convenience and compatibility, it often makes sense for a company to utilize a variety of cloud providers to meet their needs. This is especially true for larger organizations with very specific workload needs that can’t simply “make do” with an inferior alternative service. A cloud platform’s sales software may be ideal for a company’s sale’s department, for instance, but their accounting department might need a very specific program offered only by a competing cloud provider. Building a multi-cloud environment gives an organization plenty of flexibility when it comes to selecting and integrating services. Since multi-cloud architecture typically incorporates a private server for storing proprietary data, shifting from one cloud service to another is a much easier process and gives the vendor far less leverage over the customer. Colocation data centers provide many of the resources needed to set up a versatile multi-cloud environment.

Keep Your Data Local With a Hybrid Cloud

One of the biggest risks of committing to an entirely public cloud solution is that customers surrender control of their data. While they still manage the data, they do so within a public cloud environment and are at the mercy of any changes the provider makes to that environment. If the vendor suffers from frequent downtime or is affected by a security breach, their customers are limited in how they can respond. A hybrid cloud architecture can avoid some of these dangers by keeping data stored locally in a private server (either physical or virtualized) and only moving it into the cloud when it needs to be utilized by cloud applications. While the private portion of the hybrid cloud architecture will be deeply interconnected with the public cloud service, customers retain both control and visibility over their data. Should they need to “unplug” from the cloud, they can do so without having to worry about how they plan to recover their data. As with multi-clouds, colocation data centers make it easy for companies to implement a hybrid cloud architecture that meets their needs.

Avoid Proprietary Formatting

In some instances, a company may not be able to avoid storing some of its data or applications in a public cloud environment. Once they determine the amount of control they’ll have over that data and how much it will cost them to remove it from the cloud, they also need to be sure they’ll be able to actually use it when they get it back. Many cloud providers not only charge a fee to migrate data out of their cloud platform, but they also provide it in a format which renders it useless to anyone else. That’s because many cloud providers store data using a proprietary format that is only compatible with their own services. This is an all-too-common reason for vendor lock-in. Unfortunately, many companies fail to realize this until it’s too late, paying hefty fees to recover data that they’re no longer able to read or use in other applications. When possible, it’s best to avoid this kind of formatting, or at the very least negotiate some means of getting the data back in a usable form.

Getting locked into a relationship with a vendor can be a difficult and costly experience for many companies. While there may be some circumstances where working with an exclusive vendor can be a productive relationship, it only takes one bad experience to cause companies to wish they had the flexibility to take their data elsewhere. Taking steps to minimize the impact of vendor lock-in is important for any company, but it’s especially crucial for smaller companies that might find themselves relying upon a public cloud provider before realizing how difficult it might be to get their data back. By carefully researching cloud vendors and taking steps to retain control over their data, companies can protect their most valuable assets while also gaining access to the cloud computing resources they need to deliver innovative products and services.

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