Businesses now depend heavily on third-party providers for essential daily operations. While this brings clear benefits, it also introduces risks that must be understood and managed early.
Vendor lock-in is the top concern for any outsourced service that is, or could become, mission-critical. Let’s explore what vendor lock-in is, why it's a challenge, and how you can avoid vendor lock-in.
Vendor lock in is a situation where a business becomes dependent on a single vendor, making it costly or difficult to switch to another provider. This usually stems from things like proprietary systems, custom code, or closed data formats that don’t transfer easily. The result? You lose flexibility, face steep costs to migrate, and risk serious continuity issues if that vendor ever falters.
Vendor lock-in has become even more of a concern with the rise of SaaS and other cloud-based platforms. When critical services live in the cloud, businesses can suddenly find themselves exposed, whether that’s due to a provider going offline, shutting down entirely, or changing their terms without warning. Without the right risk mitigation strategies in place, even a minor disruption can spiral into a serious continuity issue.
This is not even strictly an issue associated with overcommitting to a single vendor. You might have a number of third parties providing different solutions that are critical to your operations and still find that vendor lock-in strikes with disproportionately disruptive results if just one vendor falters.
These factors make risk mitigation solutions like software escrow a must-have for responsible businesses. Making software and data accessible, portable, and recoverable if the original provider suffers a setback is the surest way to avoid vendor lock-in. Of course, this is just the start of preventive measures. Now you understand what vendor lock in means, let’s take a look at how to avoid vendor lock in.
Avoiding vendor lock-in starts with a few key best practices and a clear understanding of the risks that come with outsourcing. Here’s how To Avoid Vendor Lock In:
Step 1: Identify and assess risks during procurement
Where vendor lock-in is concerned, prevention is better than the cure. This means you need to be on the lookout for factors that will result in lock-in before committing to any arrangement with a third-party provider.
Let’s say you’re going to migrate over to a cloud app to handle email services. You need to analyse the way in which prospective vendors will handle elements like data storage to ensure that if you eventually decide to migrate elsewhere, doing so will not only be possible but will also be straightforward rather than convoluted.
Step 2: Address portability proactively
Another vendor lock-in issue arises when you want to move an application from one third-party infrastructure to that of a rival. This raises the question of app portability, which depends on how achievable the migration is and what changes (if any) are required as part of it.
Achieving portability is a process with its own costs and complexities, so you must also consider the degree to which it will be necessary and whether there are existing apps built with this in mind so you don’t have to start from scratch.
Step 3: Plan your exit immediately
It’s safer to assume you’ll eventually part ways with a vendor, so plan for that from the start. Having a documented and tested exit strategy in place for critical applications will allow you to remain in control and avoid vendor lock-in.
Formulating this plan involves seeking assurances from third parties about their ability to assist with the transition away from their services. It’s reasonable to ask them what they offer in terms of interoperability and portability, how the contract applies in the event of termination, and the time frame involved in closing an agreement.
Step 4: Have a plan for continuity
The best way to avoid vendor lock-in is to back up critical data and secure access to third-party software so your operations can continue as normal, no matter what happens to the vendor. Securing assets such as source code and access credentials with an independent software escrow agent ensures continued access and control over critical services, even if the vendor is no longer able to support them. So, if your vendor faces disruption, you can still recover quickly, even with SaaS.
Earlier, we discussed how software escrow can help mitigate the risk of vendor lock-in. As the global leader in Software Escrow, Escode has the experience to protect your critical software assets, data and documentation, ensuring they are accessible and can be transferred either in-house or to an alternative vendor if needed.
Get in touch today to learn about our software escrow services and how we can help you build a robust business continuity plan to avoid vendor lock in, including testing and documentation, to protect your operations and avoid vendor lock-in.
