Geeks2U Promise
We guarantee you'll love our fast, friendly service - or we'll refund your money.  
133,572 Happy Customers & Counting
Need tech support?
1300 769 448
Extended hours, 7 days a week
Home  /  geekspeak  /  Beware the risks of vendor lock-in

Beware the risks of vendor lock-in

Every business is at the mercy of outside factors, whether they’re unstable foreign exchange rates, unexpected weather patterns or uninvited guests making off with your office computers. All the threats which are relevant to your business, however unlikely, should be covered in your risk management plan.

Your plan needs to consider the likelihood and potential impact of each threat along with ways you might mitigate the risk.

The trick to running a successful business isn’t simply to avoid risk, the trick is to identify and manage risk. When you’re drawing up a list of potential threats to your business, don’t forget to include the vendors on which you rely in order to get things done. Particularly if you have structured your business around that particular vendor.

Every time you become dependent on a new service, application or device, you’re putting a little bit of your business’ future into someone else’s hands. That’s a risk. Even your large customers are potential risks if you become too reliant on them.

You might view your suppliers and customers more as partners than threats, but think about how you’d cope if they went out of business tomorrow. That might seem unlikely, but what if they simply change a product/service in a way which significantly impacts on you? How disruptive are their decisions for your business?

One of the key ways to mitigate risks from your suppliers is to avoid vendor lock-in.

If it would be painful and expensive – or simply impossible – to change to a competing vendor, then you’re staring down the barrel of vendor lock-in.

You’re at their mercy and perhaps locked into their upgrade cycle. If they decide to double the price, force you to buy the new version every year or discontinue features on which you rely, then you might have no choice but to play along, whatever the cost. You need an exit strategy.

Vendor lock-in can occur anywhere throughout your business. It might be your choice of cloud storage or Software as a Service provider. It might be the choice of a key IT system, such as your accounting, e-commerce, customer relationship management or content management platform. It might be the hardware you use to run your inventory management and point of sale systems. It might even be the handheld gadgets you issue to your mobile workforce.

Play devil’s advocate and think about how a change to any of these products or services would impact your business. Alternatively, would you need to abandon significant hardware/software investments in order to change vendor?

It’s important to assess the risks of vendor lock-in during the research and evaluation stage of the purchasing cycle. Don’t wait until after you’ve handed over your money and tightly integrated that vendor into your business. It’s not just about money, the risk can be just as great if you’re relying on a free service. In fact the risk might be greater, because the vendor is less obliged to keep offering and supporting that service.

Before you commit to any vendor, ask yourself how difficult it would be to switch to a competitor.

Don’t take their word for it, do your own research. The more mission-critical that vendor is to your business, the more important it is to make the right choice. Will your business processes be totally reliant on proprietary hardware or services?

Will your data be locked away in proprietary formats? What are the options for exporting that data in a format which can be easily imported into a rival service?

It’s important to think about the big picture. Will the choice of a particular vendor cascade through your organisation, locking you into other vendors which may be less reliable? Will your choice of vendor impact on your relationship with your suppliers and customers?

In a perfect world your business would be completely vendor, platform and device agnostic, but realistically you’re likely to trade some freedom in return for advanced functionality and other benefits. You’re always going to be somewhat reliant on your vendors and there might be a solid business case for sacrificing some freedoms – but make an informed decision. Think carefully about the potential long-term price of putting your destiny in someone else’s hands.

About Author

David Hancock

David Hancock is the founder and managing director of Geeks2U, a national on-site computer repair and support company.

Recent News

We’ve ALL been there. You’re working away on that big monthly report for work and all of a sudden you start to hear what sounds like a fan going into overdrive. Panicked, you pick up your laptop and it’s super hot to the touch! Your computer starts working slower than usual and you even get

Every year since 1967, the US Consumer Electronics Show, or CES for short shows off the latest in technological innovations and products that manufacturers are hoping to bring to market. Back in 1967, that would have encompassed a lot of radio and TV products. You don’t so much see radio as a key part of

As I’m writing this, the Consumer Electronics Show that would usually take place in Las Vegas is instead being staged entirely online, due to the ongoing pandemic issues. CES has for the longest time been the place where big consumer electronics companies show off their latest TV innovations, and while it’s not debuting this year,

Like many Australians, I survive our hotter summer months thanks to the invention of air conditioning. Not that I can’t sweat it out when I have to, but equally, a good AC unit can make a hotbox of a home into something considerably more comfortable. Air conditioning isn’t a new invention – I looked it

Coronavirus (COVID-19) Update

Learn about the precautions we are taking and our new contactless pick-up and remote service options. Read More
Get help setting up your home office or homework area today. Learn More