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Cloud computing

Does cloud increase vendor risk?

For all the marketing speak from technology providers about open systems, seasoned CIOs know that every software purchase is accompanied by a certain vendor risk. User comfort, proprietary programming language and opaque database structures are a few factors that contribute to vendor lock in.

And this is in the case of onpremise software.

Cue to the world of cloud.

A SaaS / PaaS vendor can:

  • Change features without the customers’ consent. And many of them do so not infrequently, as I’d highlighted in Three More Ways How Tech Vendors Can Accelerate Legacy Transformation.
  • Abscond with the customer’s data when they shut down. This happened to us recently with 1daylater, a cloud-based provider of timesheet and invoicing software. The SaaS company promised to send us our data going past three years when it closed shop six months ago. We still haven’t got anything. Meanwhile, we’ve gone back to Excel – warts and all, it’s simple, the data is stored on our own servers and we’ll always have access to it.
  • Threaten the existence of companies by raising platform costs overnight. Let me quote Twitter Doghouse as a recent example. This app allows users to temporarily UNFOLLOW Twitter accounts of people who flood your timelines – e.g. tweeters from live events – and FOLLOW them back automatically after a predefined interval. Great app. It even won a prize in Canada. But the company that developed it was pushed into an existential crisis when its platform provider trebled its prices recently.
  • Literally turn off the software tap. This might happen only under extenuating circumstances but when vendors resort to this extreme step, many of them do so unilaterally and without any prior consultation with their customers.

Therefore, cloud computing seems to raise vendor lock in to the next level compared to onpremise software.

That said, its inherent pay-per-use / subscription business model helps customers substantially mitigate this risk.

What do you think? Let us know in the comments.

Contributed by: S. Ketharaman

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