Cloud Vendor Lock-in: Like Bending Spoons?
Vendor lock-in is traditionally seen as a serious problem. I have a different view. What comes to mind when I think about lock-in is a quote from the movie, The Matrix: “Do not try and bend the spoon. That’s impossible. Instead, only try to realize the truth: There is no spoon.” The spoon isn’t real, and maybe cloud vendor lock-in isn’t real, either.
I recently read a blog by Adam Burden, Accenture’s chief software engineer, entitled, “Why vendor lock-in is now a price worth paying.” Adam compares the risks of cloud vendor lock-in with the benefits that come from being able to leverage a cloud provider’s proprietary features. He observes that there are signs that the instinctive avoidance of vendor lock-in is starting to soften. When faced with the trade-off, more and more enterprises are accepting cloud vendor lock-in.
It is false to say that lock-in negates the benefits of a provider’s proprietary services. In The Matrix, humans have become trapped in an alternate reality they suppose is real. Similarly, enterprises have adopted an alternate reality where the perception is that switching cloud vendors comes at a significant price. In the “really real” world, the cost of switching cloud vendors, and therefore mitigating lock-in, has never been more affordable.
Why are we afraid of lock-in?
It comes as no surprise that enterprises have an underlying fear of lock-in. History has shown that vendors can make it painful for customers to take their business elsewhere. The world is littered with examples of vendors acting aggressively to keep your business—enforcing high switching costs, leveraging restrictive licensing terms and invoking audits.
With the birth of cloud, enterprises had the chance to avoid upfront hardware investments and software licensing commitments, finally gaining some leverage against a generation of bad behavior by vendors when it came to lock-in. Unfortunately, enterprise scar tissue runs deep, and previous lock-in pains have remained front of mind.
Multi-cloud offered the idea that interoperability between clouds could offer a mechanism to avoid cloud lock-in. Lack of cloud standardization meant that the multi-cloud defense against lock-in never really materialized. However, the fear of lock-in is so prevalent that the idea of multi-cloud interoperability has given rise to a proliferation of cloud agnostic vendors selling the multi-cloud promise.
Actually, there’s no such thing
There is no such thing as lock-in unless you agree to it contractually. Lock-in has become the anticipated fear of the perceived difficulty required to switch vendors. Yes, there is always a cost to switch, but far less so with a large cloud provider’s proprietary services. Even a cloud-agnostic approach will not avoid switching costs, but instead will result in a lowest-common-denominator cloud strategy, with a larger price tag.
The reality is that the anticipated fear of vendor lock-in only occurs when an organization invokes a switch. The desire to switch providers could be caused by a variety of things. You may feel that you’re no longer getting good value for cost. The provider could be underperforming, leading you to lose market position. Or you might be looking for more innovation and continuous improvement than you’re getting. The top-three reasons for switching are:
- The vendor is forced into receivership. Could this happen? The cloud mega-platforms are consistently lauded as the top-ten most valued companies by market capitalization. It is inconceivable, then, that any of them would go under. A more plausible victim of receivership, and therefore at risk of invoking a switch, would be one of the cloud-agnostic or on-premise vendors.
- The vendor is no longer relevant in the market. Cloud is at the forefront of innovation. The cloud mega-platforms are leading the way as they all look to capitalize on a market that is expected to reach $354.6 billion by 2022 (source: Gartner). The cloud mega-platforms are pouring tens of billions of dollars into research every year, so it is unlikely that they will lose market relevance.
- The vendor is consistently behaving badly—for example, constantly forcing unwanted upgrades or raising license fees. No one can predict bad behavior, but there are behavioral patterns that can be anticipated and therefore avoided:
- Upfront investments. Cloud is designed to be on demand, so customers only use the services when they see value, and are free to use the technology of their choice when and where they want.
- Software licensing commitments. By design, cloud is pay-as-you-go, allowing customers to shut down their environment and walk away without ever incurring another expense.
- Forced upgrades. With cloud proprietary services, new technology and software updates are always under development. These new updates and features are added all the time and are seamless to the consumer. The costs of these are distributed automatically and proportionately among the entire user base with no effort required from the consumer.
- Unwarranted price increases. Cloud vendors have historically slashed prices. Customers have already experienced several hundred reductions this past decade and, in a low-margin, high-volume industry, should continue to see several more.
- Affordable cuts. It’s easy to drop prices, but can the vendor afford a price cut without putting its business at risk? AWS is the only vendor that offers full transparency to shareholders into its cloud revenues. So, while we can know with confidence whether or not Amazon can afford to drop prices, it’s less obvious for the other cloud vendors.
- Over-charging. Although oversubscribing (agreeing to more services than the client really needs) has historically been common with vendors, some cloud platform providers have acted honorably and chosen to work with customers to proactively reduce their consumption based on what they actually need.
What are the benefits of realizing that the spoon is not real?
The major cloud providers’ pace of innovation and their behavioral patterns should reassure you that they will continue to win business, maintain market relevance and perform admirably—some more than others. It was cloud that made it possible to negate the previous generation of bad behavior when it came to lock-in, and it will be cloud that continues that trend.
There is great power in knowing what’s real and what isn’t. When organizations understand that the perceived cost of switching cloud vendors is not real, they can unleash the potential of adopting cloud’s proprietary services, knowing with confidence they have made the right call. The spoon may not be real, but the benefits of innovation definitely are.