When the cost of switching supplier is so high that you stay for reasons other than the product being the best one. Not all lock-in is deliberate, but all lock-in must be known.
Definition
Vendor lock-in arises when the cost of switching grows larger than the gain from switching. The customer is formally free and effectively bound. What matters is not whether they are allowed to leave, but what leaving would cost them.
Lock-in rarely sits in one place. It builds from several layers, each of which looks reasonable on its own:
Data in a format only the vendor can read. Interfaces documented for whoever is already inside, but not for whoever is to take over. History that lives in the system rather than with the customer. Knowledge that exists only in the vendor's own people. Integrations to ten neighbouring systems, each one a thread that has to be cut. Contracts where termination triggers work nobody has budgeted for.
Lock-in is not the same as malice. A system that does a specialised job well has switching costs by nature, and a vendor who has worked with you for ten years knows things about your installation that are written down nowhere. That cost is real and worth paying.
The distinction lies in intent. A switching cost that follows from the work is a consequence. A switching cost built in to keep the customer is a business model, and it is usually priced into everything you buy afterwards.
In the energy sector the time horizon makes the question sharper than in most other industries. A facility stands for thirty years. The systems that describe it change several times in that period, and the data has to outlive both.
Four questions settle most of it, and they are worth asking before the contract rather than after:
Can I get all my data out, in a format someone else can read, without asking permission? Are the interfaces documented well enough for another vendor to connect? Who owns the data model and the terminology, me or you? What happens the day the agreement ends, and who does the work?
Our own position is to answer those questions with the architecture rather than with a promise. The products stand on their own and can be bought separately. That means weaker lock-in and a lower threshold for replacing us, and it is a decision that costs us something in the short run.
Røkte is the same decision taken again. We manage systems from vendors we compete with elsewhere, and make the customer better at something we did not build.
The reason is not generosity. A customer who stays because they want to stays longer than one who stays because they must, and they tell others. Simon Sinek describes the difference as playing for the quarter versus staying in the game.
In practice
Four questions settle most of it, and they are worth asking before the contract rather than after:
Can I get all my data out, in a format someone else can read, without asking permission? Are the interfaces documented well enough for another vendor to connect? Who owns the data modelFormal representation of data structure, relationships and constraints - foundation for database design and system messages. and the terminology, me or you? What happens the day the agreement ends, and who does the work?
Our own position is to answer those questions with the architecture rather than with a promise. The products stand on their own and can be bought separately. That means weaker lock-in and a lower threshold for replacing us, and it is a decision that costs us something in the short run.
Røkte is the same decision taken again. We manage systems from vendors we compete with elsewhere, and make the customer better at something we did not build.
The reason is not generosity. A customer who stays because they want to stays longer than one who stays because they must, and they tell others. Simon SinekAuthor and speaker. 'The Infinite Game' argues that business is a game without an end, where the aim is not to win but to stay in it. The Golden Circle is the famous model; this is the important one. describes the difference as playing for the quarter versus staying in the game.
