What Is Cloud Vendor Lock-In (And How To Break Free)?

When you move an application to the cloud, the core motivation is often to break free from the demands of maintaining the infrastructure on your own. However, if you’re not careful, you might easily end up in a cloud lockup. This is called cloud vendor lock-in – a scenario where you become tied to a cloud service provider without an easy or cost-efficient way to break free.

cloud vendor lock-in

Discover why vendor lock-in is a problem and how you can mitigate this risk to take full advantage of offering in the public cloud ecosystem.

What is cloud vendor lock-in?

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 on a single cloud provider for a specific service (or a bunch of them). You 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 one might be a pain. What if the first provider increases their pricing or starts experiencing frequent downtime?

Note: Vendor lock-in may also happen in containerized applications and use Kubernetes, as the same issue arises with K8s platform providers.

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

Imagine that you decide to change your provider because the current one no longer supports your requirements. 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 unable 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 extremely challenging too.

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 the 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. When doing so, providers 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, Microsoft, 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: Cloud Pricing Comparison: AWS vs. Azure vs. Google Cloud Platform in 2022

Cloud vendor lock-in = 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 difficult.

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 5, 10, or 15 years from now!

Here’s a good example of how this works: We compare two machines that look similar on paper as they both have four cores. Using our performance benchmark, we revealed that OracleVM.Standard.E2.4 offers almost twice the blended compute capacity over 24 hours than its Google Cloud equivalent.

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 the terms finish.

2. Make your apps and data portable

Portability is key in the cloud. By ensuring it, 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 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. 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.

Avoid vendor lock-in with a smart cloud strategy

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 businesses should fully benefit from public cloud services without making any compromises, benefitting from cost optimizations and gaining greater control over their budgets.

CAST AI puts engineers in the driver’s seat, letting them slash their maintenance and configuration workload in the cloud while benefitting from a wide range of automation features. If you run your containers in one of the most popular Kubernetes managed services – Amazon EKS, GKE, or AKS – you can find out how much you could save up.

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

CAST AI clients save an average of 63% on their Kubernetes bills

Connect your cluster and start monitoring your Kubernetes costs in 5 min, no credit card required.

What is vendor lock-in in cloud computing?

The vendor lock-in problem in cloud computing occurs when clients become reliant (i.e., locked-in) on a single cloud provider’s technological implementation and are unable to switch vendors in the future without incurring significant fees, legal restrictions, or technical incompatibilities.

Is vendor lock-in bad?

Vendor lock-in is a barrier to businesses adopting cloud computing. The issue is a lack of knowledge of the absence of standards, which prevents application compatibility and portability.
Imagine that a vendor’s service quality deteriorates over time for whatever reason. Or that it never reaches the promised level. Once you’ve committed to a cloud vendor, you’re stuck with them – even if their services fall short of your expectations.
What if the vendor makes a significant modification to their product offering, causing it to no longer meet your requirements? You’re in trouble.
To fulfill new market needs, a vendor may make additional adjustments to the offer and significantly raise the cost. Providers know that their clients would prefer to pay that than incur the fees of moving to a new provider if they did so.

How can vendor lock-in be avoided?

Research your cloud vendor – Ask for a proof of concept deployment to verify whether the vendor’s level of service matches your needs. Examine the provider’s terms of service and SLAs as well. Double-check your contracts for auto-renewal. 
Focus on data and app portability – There will be (almost) nothing prohibiting you from experimenting with multiple cloud options in this manner. Generally, cloud companies embrace open standards in a variety of industries. Your workloads must support non-proprietary alternatives in order for switching providers to be simple.
Pay attention to the formats you’re using – If you want to keep part of your data or apps in a public cloud environment, be sure you understand how much control you’ll have over them and how much it will cost to remove them.
Choose multi cloud – To decrease your reliance on a single vendor, develop and implement a multi-cloud strategy that leverages the services of many cloud providers at the same time. To suit their changing demands and workloads, businesses frequently use a range of cloud services and get to enjoy a lot more flexibility.

What is the data lock-in problem?

When moving data or apps to another vendor’s platform is difficult and expensive, consumers become increasingly reliant (locked-in) on a single cloud storage provider. This is the essence of the data lock-in problem.

What is cloud interoperability?

Cloud interoperability is the capacity of systems to function efficiently and collaborate successfully across multiple cloud platforms. Interoperability is difficult to achieve since these criteria are based on data and application component synchronization across multiple cloud platforms.

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