Why do you think they call it "lock-in"?
June 18, 2006
Dave Winer writes, "The only criteria for winning that should be tolerated, by anyone, are features, performance and price. Lock-in is not an honorable or sustainable way to win." I don't think it's that simple. It may not be honorable, but as far as "ways to win" go, lock-in is actually extraordinarily sustainable - much more so, in fact, than features, performance, and price, which all tend to get neutralized more quickly than lock-in does. Many of the greatest franchises in the history of the computer industry, from the IBM mainframe to Windows and Office to HP's ink cartridges to eBay to the iPod and iTunes, have been sustained by lock-in. And that's going to continue to be true. As Berkeley economists Carl Shapiro and Hal Varian have written, "The 'friction-free' economy is a fiction; look for more lock-in, not less, as the information age progresses." In many cases - though certainly not all - customers actually like to be locked in; it can make things simpler, and simpler, for most people, is better.
Nothing lasts forever, of course, but if you're looking for a durable business strategy, lock-in is mighty hard to beat.
Actually, these days, lock-in is even being *litigated*, both in terms of anti-trust on one side, and DMCA/shrink-wrap laws on the other.
Posted by: Seth Finkelstein at June 18, 2006 12:14 PM
and you are defending it? I know of several CIOs who in an honest moment tell me their drive to consolidate vendors was a mistake...because the cost of lock in far exceeds the management and admin savings from vendor consolidation. For some one who beats up on corporate IT I would think you would be all over the "saturated fat" which eats up so much IT budget and prevents CIOs from having much of an innovation budget.
Oh well, Alice in Dilbert has a solution
Posted by: vinnie mirchandani at June 18, 2006 01:31 PM
I agree, since this seems the only way for large vendors to get some stability over some time at least in an ever faster spinning high-tech market environment.
Posted by: Ralf Haller at June 18, 2006 02:41 PM
There is a human factor to consider with pursuing lock-ins. People consider it to be evil. The difference between the general love of Google and general hate of Microsoft is primarily that Microsoft is perceived to force people to use their products by leveraging their other technology, forcing lock-ins and targeting competition for annihilation. All the indoctrination that Microsoft's actions are "normal" or even desirable in a Capitalist system can't override our evolutionary urge to promote fair compensation.
Anyone who has ever had to buy a Microsoft product or upgrade just to maintain compatibility, gains a gut desire to see MS to fail. Before global communication, our options were limited, but today we have a growing number of ways to connect and produce without being forced to keep feeding the beast.
Posted by: Zephram Stark at June 18, 2006 11:00 PM
I think lock-in is an extremely profitable short-term strategy. However, any company that uses it is going to make itself a target for competitors and open source projects, and I can't see it being sustainable forever. Not to mention that it's really annoying when you can't do certain things just because the vendor tries to lock you in to their product. More than anything else, that drives me away from a company/product. MySpace is a perfect example of this (I recently wrote a post with concrete examples of how they hamstring their product to lock users in).
Posted by: Jason Kolb at June 19, 2006 08:48 AM
Anyone that can't demonstrate interoperability and openness gets booted out of my office.
I agree with Ordaj. For me, part of the RFP process must include evaluation of "anti-lock-in strategy".
Posted by: Erik Neu at June 20, 2006 08:21 AM
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