Technology
The Good and the Bad of Cloud Vendor Relations
Cloud vendor lock-in can impact businesses that are migrating to the cloud. Lete's take a look at some pros and cons.
Jun. 14, 2024
By Dr. Sangeeta Chhabra
With the advent of cloud technology, most organizations jumped on the bandwagon and started reaping its advantages, such as elasticity, adaptability, and security. This led to rapid growth in the cloud industry that continues to date.
However, due to a lack of planning in cloud migration, some organizations started experiencing some challenges after a certain period. A major challenge among them is cloud vendor lock-in, which I will discuss in this blog.
What is cloud vendor lock-in?
Cloud vendor lock-in occurs when the customer is unable to change his cloud service provider, even when the provider does not offer satisfactory services. Here’s an example to understand this scenario better: Assume you have a copier machine in the office. You are satisfied with its features but want another company’s cartridge. However, the copier only works with its proprietary cartridge. Hence, you can’t change the cartridge without replacing the entire machine.
In terms of cloud hosting, when you decide to switch cloud providers, or even take a particular service from a different provider, it poses certain challenges. This can be because of several reasons, such as proprietary products of a cloud provider. Each cloud provider has its proprietary products. Opting for a product from another provider can lead to data discrepancies and app redevelopment. Another reason can be the terms and conditions of the cloud contract that force you to stay with the provider. Or, you simply can’t put in the time and effort it would take to migrate.
Let’s see how cloud vendor lock-in can impact your business with its pros and cons.
Pros of cloud vendor lock-in
Let’s check out some advantages of vendor lock-in:
1. Speed to market: When choosing a single provider, the migration is easy because a common support team handles all the operations.
2. Consistency in services: Continuing with a single vendor offers you consistency in services. However, if you choose multiple providers, the quality of service may vary, and you might not be satisfied with some.
3. Better integration of products: Making the decision to continue with the products and services of a single provider leads to better integration between them.
Cons of cloud vendor lock-in
Here are some disadvantages you face due to cloud vendor lock-in:
1. Inflexibility: There are several cloud service providers in the market with distinct features and services. Some providers offer an efficient storage solution whereas others offer reliable email services. For instance, you might want applications from AWS and storage from Azure.
Because of cloud vendor lock-in, you are compelled to opt for the features and services of a single provider. Hence, you cannot get the best of both worlds. Cloud vendor lock-in prevents you from getting the optimum cloud solution for your business.
2. Dependency: When opting for a product or service, it is always better to have a range of options. It helps you to pick and choose whatever services you need.
Cloud vendor lock-in makes you too dependent on a single provider to offer the best products and services. Even if they do not get the guaranteed uptime or support, the hassles of migration and contractual obligations prevent you from moving on to a better provider.
3. Increased cost: The cloud service provider offers multiple pricing plans depending on computing and storage parameters. When choosing a cloud service provider, you choose a plan that best suits your business needs.
However, with time, you realize that the provider might be asking you for more than you need. There are some hidden charges, such as egress fees and transaction costs, that you might be unaware of. Moreover, the provider can also increase their pricing after a certain period.
Getting locked into a single vendor forces you to pay whatever the provider asks. Even if the increase in the pricing is not acceptable, you have no option but to continue with the provider.
4. Low power of negotiation: During the phase of choosing a cloud service provider, the provider offers you all types of offers and discounts so that you are inclined to select them. They guarantee a fixed quality of service (QoS) and lucrative benefits.
Vendor lock-in means you lose all your bargaining power after you have selected a cloud provider. Hence, after a certain period, if you want lower pricing than the competitors are offering, you can’t negotiate with them.
5. Limits innovation: As an organization, you are always looking for new and better technologies for innovation. However, due to vendor lock-in, you are often forced to use their technology even if the competitor deploys a better one.
How to avoid cloud vendor lock-in
In the previous section, we saw what cloud vendor lock-in can do to your business process. So, how can you ensure you are not locked into a vendor? Here are some precautions you can take to prevent cloud vendor lock-in.
1. Read the SLA carefully: Before opting for a cloud service provider, analyze their SLA (service level agreement) carefully. The SLA describes all the terms and conditions of the partnership. You can negotiate the terms of exit when choosing the service to ensure a smooth transition to another provider.
2. Use open standards: Various open-source platforms, such as Kubernetes, are available in the market. These platforms allow organizations to carry out processes such as containerization, application deployment, etc. Using these open standards allows easy migration to another cloud service provider because of increased portability.
3. Use a multi-cloud strategy: A multi-cloud strategy entails opting for services from multiple cloud service providers. It is recommended to use a multi-cloud approach before transitioning to the cloud because once you have migrated everything to a single provider, it becomes tough to switch providers.
To sum up!
Cloud vendor lock-in can force organizations to pay more than they can afford because they have no other option than sticking with a single provider, irrespective of their incompetencies or price hikes. Hence, you should consider cloud migration as a gradual process, and not choose a single provider at one go. Putting all your eggs in one basket can lead to a no-way-out situation for your business.
ABOUT THE AUTHOR:
Dr. Sangeeta Chhabra, co-founder and director of Ace Cloud Hosting, is a leader and innovative entrepreneur with more than 20 years of experience in the IT sector. She has positioned the company as a leading global provider of IT and managed cloud services, celebrated for its QuickBooks hosting tailored for the accounting sector, as well as its Managed Security Services and Public Cloud offerings for SMBs and enterprises. Under her leadership, Ace Cloud was honored as the Best Outsourced Technology Provider at the CPA Practice Advisor Readers’ Choice Awards 2023, among other accolades. Beyond her professional successes, Dr. Chhabra is a passionate advocate for women’s empowerment and is committed to fostering an inclusive environment at Ace Cloud.