The cloud now plays a crucial role in the day-to-day operations and performance of countless businesses around the world.
In the EU, 41% of enterprises used cloud computing in 2021 - an increase of five percentage points from 2020. While this technology was commonly utilized to host email systems and store files, nearly three-quarters (73%) of businesses used sophisticated cloud services for purposes such as cybersecurity, database hosting and application development.
To get the most out of the cloud, it's important to be aware of common problems and pitfalls, so you can be sure to avoid them. One such issue is cloud vendor lock-in - a scenario that could have significant repercussions for your business if it's not managed carefully.
What is cloud vendor lock-in?
This situation occurs when a business finds itself 'locked in' to a cloud service that it may not be satisfied with, because the financial costs or operational ramifications of moving to another provider are such that switching is considered unfeasible.
If you’ve been using the same vendor for a long time, for example, you might have various databases, business processes and key elements of your IT function running on the software this business provides. In the event your supplier decides to increase its prices, or there’s a noticeable decline in the quality of service you receive, you might be stuck with these less-than-ideal circumstances simply due to the financial, technical and practical implications of switching.
This is a position no company wants to find itself in, so you should make sure you're prepared with a plan to protect you and the business from the dangers of cloud vendor lock-in.
How can businesses avoid vendor lock-in?
To significantly reduce the risk of vendor lock-in, here are five best practices:
1. Know the risks from the start
Prevention is better than cure, so the saying goes. This is a philosophy that can be applied in practically any area of business, since avoiding a problem is always preferable to dealing with it after the fact, when the damage to the company may have already been done.
Make sure you're fully aware of the risks of cloud vendor lock-in and you have measures in place to mitigate them before you commit to a supplier relationship. A crucial part of this process is doing your research on potential providers and ensuring you're always prepared with an exit strategy, should a change of vendor become necessary.
Read the fine print on all policies and contracts you're presented with, scrutinize service level agreements and be prepared to ask questions about:
- How prospective suppliers facilitate the migration of customer data and applications away from their systems and storage repositories
- Specific tools and services they offer to support the transfer of large amounts of data
- What they’ve done to help past customers exit their contracts with minimal disruption
2. Prioritize portability
You should always have confidence that your key data and applications are portable - meaning they can be transferred from one cloud service to another without creating an unacceptable level of upheaval or cost for the business.
One of the best ways to ensure portability is by avoiding proprietary data formats. If you become reliant on a format that’s specific to one vendor, you're likely to experience problems when you want to transfer business-critical data into a new cloud environment.
It's also important to make sure your core applications aren't dependent on features that are only available with specific platforms or suppliers.
3. Back up and protect your data
A key priority to bear in mind when managing your cloud infrastructure and vendor relationships is the importance of maintaining ownership of your data. This has become more important than ever in the current era of regulations such as GDPR and CCPA, which have made the protection and management of personal data a major compliance focus for businesses.
It's good practice to back up your most valuable and sensitive data in a private cloud network or an on-premise data center. This ensures you always have access to essential assets and information, which could be crucial if the process of extracting your data from an existing cloud service proves difficult.
4. Educate your IT team
You can minimize the risk of cloud vendor lock-in - and improve your ability to manage the situation if it does occur - by providing training and education for the entire IT team and relevant stakeholders.
The people responsible for making supplier buying decisions, and for examining the finer details of third-party relationships, should be fully aware of the dangers of service lock-in and how it could impact the business.
Training and education will also help you avoid knowledge-based vendor lock-in. This occurs when your IT team's cloud capabilities and working methods become so closely linked to a particular service that the prospect of switching to another supplier becomes almost unthinkable.
Learn more: 5 Steps to Build a Successful Cloud Center of Excellence
5. Shift to a hybrid or multi-cloud strategy
Taking a long-term view, you can protect the business from future problems with cloud vendor lock-in by adopting a hybrid or multi-cloud methodology. This has become increasingly popular in recent years, with research showing that 92% of enterprises now use a multi-cloud approach and 82% rely on a hybrid cloud.
These strategies involve using multiple providers or keeping certain data and applications under your own control, often in a private cloud or stored on-premise. As a result, you're less dependent on any single vendor, which helps you maintain flexibility and cost efficiency while keeping the risks of lock-in to a minimum.
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