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What is vendor lock-in (and how to break free)?

All they want is to break free from the demands of maintaining their own IT infrastructure. Instead, they end up in a cloud lockup.

Read on to find out why vendor lock-in is a problem and how you can mitigate its risks by developing a multi-cloud strategy.

What does vendor lock-in mean?

In economics, vendor lock-in (also called proprietary lock-in or customer lock-in) is a scenario where a customer becomes dependent on a vendor for products and services, because they’re not able to use another vendor without substantial switching costs.

How does this translate to the reality of cloud computing? In public cloud services, vendor lock-in is a situation where you depend (locked-in) on a single cloud provider. You also can’t easily move to a different vendor in the future without experiencing issues such as high costs, legal constraints, or technical incompatibilities.

If you develop an application for a specific cloud platform, migrating it to a different cloud platform will be a pain. And what if the first provider increases their pricing or starts experiencing frequent downtime?

Note that vendor lock-in doesn’t happen only with the cloud. If you work with containerized applications and use Kubernetes, the same issue arises with K8s platform providers.

This is the central pain point of vendor lock-in: you become vulnerable to any changes applied by the providers.

Imagine that you decide to change your CSP because the current one no longer supports your needs. Or you want to integrate services from different providers to improve the product offer.

This is where you’ll experience lock-in. You’ll find yourself not able to move applications or data across different cloud services because the specifics of resources and services of various cloud providers (like semantics or APIs) don’t match. Tasks like service or data interoperation, collaboration, and portability become very challenging.

Why is getting locked in a problem?

  • For starters, vendor lock-in acts as a major barrier to the adoption of cloud computing by companies. The problem is the awareness of the lack of standardization, which inhibits interoperability and portability of applications.
  • Let’s imagine that, for some reason, the vendor’s quality of services declines with time. Or that it never meets the promised threshold. Once you’re on board with one cloud vendor, you’re stuck with them – even if their services don’t perform up to your requirements.
  • What if the vendor makes a dramatic move and changes the product offering so that it no longer supports your needs? Again, you’re at their mercy and can’t do anything about it. And if you decide to switch vendors, expect high costs and technical issues.
  • A vendor might apply further changes to the offer to meet new demands and, for example, increase the pricing by a lot. Doing so, CSPs know that their customers would rather pay that instead of bearing the costs of switching to a different vendor.
  • Finally, a vendor might go out of business altogether! That’s not very likely for Amazon or Google, but potentially realistic for smaller providers.

When you decide to use the cloud service of a vendor, you’re handing off your core business technology to an external company. It’s not easy and requires a lot of trust in the vendor.

When reviewing different offers from vendors, you can easily get lost in the pricing maze and end up paying more than you wanted. We explored this problem here: How to Compare the Cost of AWS, Azure, Google, and Oracle, Once and for All.

Vendor lock-in means lost opportunities

Similar resources come at different prices across providers. But they also come with different capacities. That’s why choosing the best cloud platform is so challenging.

You’re bound to always find another VM shape of similar capabilities that costs less than the one you’re currently using. And this is only today – just think about the options available in 5, 10, or 15 years from now!

Here’s a good example of how this works: Here are two machines that are similar on paper as they both have four cores. Oracle VM offers more memory, but the price is very similar. Using our performance benchmark, we revealed that, in fact, OracleVM.Standard.E2.4 offers almost twice the blended compute capacity over 24 hours than its Google Cloud equivalent.

Oracle and Google Cloud Compare

So let’s say that you’ve been using Google Cloud and you spot a great cloud service pricing. Taking advantage of it isn’t going to be easy because before you know it, you’ll be locked into your cloud provider.

How to avoid the risk of getting locked in?

1. Research your cloud vendor

It pays to thoroughly research a cloud provider before making any commitments. Ideally, you should ask for a proof of concept deployment. This allows you to verify whether the vendor’s level of service is enough for your needs.

Moreover, when entering into an agreement with a cloud vendor, make sure to examine their terms of service and SLAs closely. This is how you can understand how the company handles data and application migration in terms of the legal and financial obligations to be met.

Note that many providers charge a fee when their customers migrate data and other applications out of the cloud service. Knowing how much it will cost to migrate to another vendor (both in terms of money and time) will help you plan for an exit if your business priorities change.

Also, double-check your contracts for auto-renewal. Many vendors auto-renew contracts for a new term unless they’re first notified by you. Keep a close eye on your contracts, monitor your contractual commitments, and know when terms finish.

2. Make your apps and data portable

This way, there will be (almost) nothing stopping you from choosing various cloud alternatives. Cloud vendors usually support open standards across different verticals. For switching vendors to happen easily, your workloads need to support non-proprietary alternatives.

If your workloads are based on the vendor’s APIs, configurations, and features of proprietary technologies, all of which don’t support open standards, you will be locked-in for good. Also, by not supporting open standards you might be facing serious customizations later on to avoid the lock-in.

3. Keep a close eye on your formats

If you’re planning to store some of your data or applications in a public cloud environment, make sure that you know how much control you’ll have over it – and how much will it cost you to remove it from the cloud.

Most importantly, you need to be certain that you’ll be able to use this data once you get it back. Many cloud providers store data in proprietary formats that make it useless to anyone using different rolls. This is a common reason behind vendor lock-in.

Even if you end up paying high fees for recovering data, you might not be able to use it. So make sure to avoid proprietary formatting or at least negotiate a deal for getting the data back in a form that makes it usable.

4. Consider an alternative cloud approach

When you commit fully to a public cloud solution, you surrender control of your applications and data to the vendor. You’ll be at the mercy of the provider regarding any environment changes, pricing alterations, or even issues like downtime.

By investing in other types of cloud architecture like hybrid or multi-cloud, you can avoid some of these risks. For example, in the hybrid scenario, you’ll be keeping your data stored locally on a private server and only moving it into your cloud platform when it needs to be used by cloud applications.

That way, you retain the control and visibility over your data. If you decide to no longer use the public data solution, you can unplug from it knowing that your data doesn’t need to be recovered.

5. Build a multi-cloud environment

A multi-cloud approach is based on using the services of multiple cloud providers at the same time to reduce the dependence on a single vendor. Companies often utilize a variety of cloud providers to meet their evolving needs and workloads.

By building a multi-cloud environment, you’ll gain plenty of flexibility in selecting and integrating different cloud services. But this is just the tip of the multi-cloud iceberg…

Multi-cloud is the answer to vendor lock-in

According to a Flexera, 93% of enterprises already have a multi-cloud strategy. Why are companies using multiple public cloud platforms? The IDG 2020 Cloud Computing Survey revealed that the primary goals behind going multi-cloud is to take advantage of best of breed platforms and service options (49%), cost savings/optimization (41%) and improving disaster recovery or business continuity (40%).

But if you focus on the goals of enterprises only, you will spot “avoiding vendor lock-in” as the second most important goal (40%).

By going multi-cloud, companies can distribute their workloads independently of the underlying vendor infrastructure. In our understanding of multi-cloud, developers can not only spread applications across multiple services but even use several public cloud platforms to support a single application.

A multi-cloud strategy requires taking some extra steps in optimizing for cost and achieving the right cost vs. performance. If you get it right, you can eliminate many of the risks that come with vendor lock-in. Your applications and data can operate on a mix of multiple cloud platforms by design.

Wrap up

At CAST AI, we aim to empower developers to use the exact cloud services their containerized application needs, in any region they like.

We believe that moving workloads from one platform to another should be a trivial and automated task. That way, businesses get to benefit from cost optimizations and gain greater control over their budgets.

CAST AI helps developers to deploy containerized applications that span across multiple cloud environments. If you use containers, you don’t have to (re)write anything – we take care of all management and deployment of standard Kubernetes.

And then we find the most cost-effective cloud services and locations for your containers. You don’t even have to lift a finger – create simple policies that dictate the boundaries of optimization and get the right balance of services automatically.

Curious to try CAST AI? Sign up to see how it could help you break free from CSP limitations.

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