Vendor lock-in
Vendor lock-in is the principle whereby a customer cannot switch to another supplier for a particular product or service without incurring high costs. The characteristics of the product and the previously incurred costs create a barrier for the customer to switch to a competitor.
Creating a vendor lock-in may consciously or unconsciously be a strategy to retain customers. In some cases, a vendor lock-in can be used to hold on to a monopoly position.
Vendor lock-in in ict
The phenomenon of vendor lock-in occurs frequently in the field of ICT, for example. When the customer has invested in the purchase or construction of a certain system, it is not always possible to take it one on one to another supplier. This phenomenon occurs with both hardware and software. Here are some concrete examples.
The choice of operating system determines the software you can use on a computer. Programs intended for Windows cannot simply be used under Apple or Linux and vice versa. In addition, a user license is limited to one particular operating system. If you switch to another platform, you have to buy many programs again. Apple and Microsoft have also been frequently accused of taking advantage of their dual roles when writing software for their own operating systems. For example, they have capabilities in their own environments that competing software developers do not, and certain programs are included for free with the operating system, putting others at a disadvantage.
When a company has a custom application programmed by a software company, it is often not possible to transfer its maintenance and further expansion to another party. This may be because the vendor's license or terms of delivery do not allow it. Or that it is not realistic for a new party to take over the management of the existing system, for example because of a lack of knowledge about the architecture of the custom solution. The cost of having the program rebuilt creates a barrier to switching.
When you buy a printer you are stuck with that same brand for ink or toner cartridges. Manufacturers make sure that cartridges from different brands, often even from different models, are not interchangeable. It is on these refills that manufacturers make the most profit. To switch to another brand, a customer will first have to buy a new printer Only by choosing cheaper B-brands can users save on the cost per print. These are not officially supported by the printer manufacturer, which can lead to the loss of warranty, among other things.
One way to avoid vendor lock-in is to choose open source software. This is (usually) free to use and often available for different platforms. Because the programs and their source code are freely available, users are also not dependent on one party for maintenance.
Other examples of vendor lock-in
Some other examples of vendor lock-in include:
- Gift cards and vouchers that can only be spent at one particular store.
- MP3 players, smartphones and other electronics where the customer decides on different standards for data cables, charging systems and peripherals;
- A telecom provider that requires subscribers to remain customers for an extended period of time when selling a phone via sim-lock;
- The obligation of having to buy razor blades of the same brand with a shaving system;
- Electric toothbrushes where you are stuck with one-brand brush heads;
- A supplier that stipulates in warranty terms that it applies only when maintenance is performed there. This is common in the automotive industry;
- With coffee systems such as Nespresso and Senseo, users long relied on cups or pads from the same brand.
