What Is Vendor Lock-In?

Vendor lock-in occurs when access to a certain type of product, service, or data is limited to the paying customers of a single vendor — in essence, a “walled garden.” While it rarely means that users are completely incapable of leaving the “garden,” typically the cost — in time, resources, and disruption — are simply too high to be worth the effort.

Another way to think of it is when digital assets your organization has paid for and might think you own — data, for example, and even software you created — is not portable. That means you cannot simply pack up those assets and take them to another application or platform.

An example on the consumer side is when music purchased on Apple iTunes could only be played on the company’s devices. If you wanted to play a song you purchased on iTunes on another device, you needed to purchase the song in a different (and costlier) format.

Vendor lock-in is particularly challenging in the data platform arena, where a data platform is any system that holds or processes data. This could be a database system, a software development platform, physical infrastructure, traditional on-premises software systems such an ERP, software-as-a-service (SaaS), or a cloud platform. If your organization is unable to port the data from those systems into comparable or competitive systems, you’re experiencing vendor lock-in.

What Are the Risks of Vendor Lock-In?

Given the extraordinary value of data to any organization, limiting its use in any way can be highly problematic. Consider the following ways in which your organization is held back by being locked in to a data platform vendor.

  • Technology stagnation
  • End of support
  • Unanticipated costs
  • Technical debt
  • Complexity
  • Platform dependence
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Technology stagnation: Imagine you invested millions in an ERP system that was state of the art when you first implemented it. Although the vendor continued to update its software, other ERP solutions began to outpace it in terms of offering new features, functionality, and delivery models, such as SaaS. You begin falling behind newer, digitally advanced competitors who are operating on more modern technology, while you have to wait for the next software update to get capabilities they already have. This type of technology stagnation can quickly stifle innovation and agility, making it difficult to respond to market risks and opportunities alike.

End of support: Similarly, what if the system you’re running gets sunsetted? You may be able to prolong its life by modifying it to perform new functionality, but eventually you will be forced to replatform — that is, take all your data and port it over to a new system — which is a potentially costly, lengthy, and highly disruptive process.

Unanticipated costs: One of the great advantages of data and application portability is that you are free to shop around for solutions that deliver the most value — a new cloud host or a new development platform, for instance. But if your company is locked in to a particular vendor’s technology, the vendor has little incentive to let you go — and you may become vulnerable to onerous charges, or a shift in cost structure that is not to your advantage.

Technical debt: One strategy to overcome technology stagnation if you are locked into a single vendor is making costly and complex modifications to the system’s source code. This type of customization can expose your organization to the risk of technical debt. 
Technical debt accrues when you take shortcuts to build applications and solutions quickly, only to have to spend time and resources fixing them down the line. If, for example, you make changes to a proprietary software system you’re locked into, those changes could break (or simply be overwritten) with the next update, placing you in technical debt. The cost of this debt — in terms of both the resources you’ve spent and the opportunity costs of time wasted — can significantly hinder a company’s ability to innovate, adapt, and grow.

Complexity: Another approach to dealing with vendor lock-in is to add more and more point solutions to get work done. But this leaves users working across multiple interfaces. The situation is even worse if the data that feed these additional solutions — and the data they generate — are not shared with each other or with your core systems. The risk of duplication, error, and inefficiency increase significantly.

Platform dependence: Some low- and no-code application development platforms can create vendor lock-in, while others can liberate your business from it. In the case of the former, consider this scenario: suppose you’ve created several mission-critical applications on a low-code platform, then decided to switch to a better-performing platform. With some platforms, it’s possible that the applications you’ve built can run only on that platform. They use a proprietary runtime engine to run applications, or produce non-standard code. This can leave your business dependent on the platform to run the apps you’ve invested in building.

How to Avoid Vendor Lock-In?

With some planning and creativity, companies can avoid getting locked in to a single vendor’s solutions. In a recent presentation, Gartner1 shared three key strategies for avoiding vendor lock-in, which includes:

  • Reading between the lines
  • Ensuring control over your data
  • Avoiding excessive customizations

Reading between the lines. Some vendors may give the impression that they do not lock you in, but be aware that a vendor might simply mean it integrates with other technologies and applications; uses standards-based languages or open-source components; or runs on your choice of cloud provider.

Ensuring control over your data. It is critical that you have complete control over your data, and that it can be ported relatively easily to a different system if necessary. For example, if working in a low-code development platform, use your own database separately as a “system of record.”

Avoiding excessive customizations. As previously mentioned, making code changes within a proprietary system can lead to massive technical debt. When choosing a vendor, make sure it lets you access system data to add new features, functionalities, and views without touching the source code.

Build Applications with Freedom and Control

Vendor lock-in can be a serious issue that limits agility and competitiveness. Unless your vendors and partners support portability, openness, and flexibility, your ability to innovate may be at risk.

The OutSystems high-performance low-code platform allows your business to innovate through software without the risk of vendor lock-in. When you create applications with OutSystems, it generates standard and optimized applications that are ready to run on a standard web farm or cloud architecture.

By generating and deploying standard applications on standard technologies and with a standard database model, OutSystems protects your investment application development investments while giving you the freedom and control to turn your ideas into software.

For more on how to avoid low-code vendor lock-in, visit our Evaluation Guide.

1How to Mitigate Vendor Lock-In, Technical Debt and Security Risks of Low-Code Development, Jason Wong, Gartner 2022