What is Vendor Lock-in?

Vendor Lock-in comes in many forms but happens to be particularly popular in the technology industries.  In every case, it appears the results are the same: client frustration.  Either the vendor or their employees are frustrated with an upset client, or a client is upset because they can't leave the provider.  This whole process is seriously inefficient, lazy, and costly.

Although KYNGIN itself is closed sources software, none of the data we host is encapsulated in a closed mechanism that we can't export as needed.  If at any time a client decides to move their data elsewhere, the databases, e-mails, dns zones, website files, storage data, and VM's are all easily exportable and can be hosted at ANY hosting company that uses the same open source technologies which are all publicly available.  KYNGIN is a product built to host your data in a plain text or binary format at lightning speed, and in doing so we never hold any data hostage or lock features behind a proprietary plugin or module that is difficult to remove after installation and setup.

Common in the commodity hosting space are vendors that ask you to sign multi-year agreements to keep pricing low.  We take a very clear position here at Mindpack Studios that if you don't want to be a client, we have no reason to keep you around.  Locking you into contract when the relationship isn't productive sounds like a huge waste of time for everyone.  By that comment, it's probably pretty clear that we stand against contractual obligations with our clients because these agreements either Option 1) Explicitly state that we are taking financial risk with our clients (likely because we have to purchase dedicated equipment and resources specific for their needs), or Option 2) Implicitly state that we have something disingenuous to hide in the business transaction but offer you a "deal" by agreeing to commit to multiple years of service.

Stick with me here for a few minutes so we can get a base line on where contracts make reasonable sense: "Option 1" above - In a more typical business transaction, if a vendor asks you to sign a multi-year agreement it typically means they are taking some level of risk with the transaction and want some way to recuperate their losses should you default on the agreement.  We are all probably familiar with this transaction style regarding larger purchases such as automobiles and homes, in which the product is costly and the bank (or car company, lending company, etc) takes risk with you purchasing something in payments over a term length.  The bank in this example will typically include a percentage for loaning the money, and that percentage is typically calculated based on your historical commitment to pay previous agreements (credit rating).  This should make reasonable sense sense to reasonable people.

Now let us talk about "Option 2" above.  The question is clear, the answer not so much, so start with the question: "Why would a company selling a product for just a few dollars a month ask you to sign a 2-5 year agreement to get an even lower price?".  This design is rampant in low-cost/bulk web hosting. Can't companies replace your reservation on a server quickly with another client?  We aren't talking about agreements here that take up 25% or even 10% of a nodes total capacity, most servers can handle the load of hundreds or even thousands of websites.  The answer is a bit more opaque.

For these low cost long-term commitments, it appears the vendor either doesn't believe the client knows what they are buying (preying upon the clients lack of education), or the vendor is selling something that isn't on the tin, providing a product that isn't exactly as advertised. In either case, the vendor is worried the client will change their mind and move elsewhere so they promise deals on large commitments.

Opposing this design, our position is pretty simple here at Mindpack: Educate the client, provide them a secure, stable, and resilient hosting foundation for their data, and if that isn't sufficient in some way, work with them on a solution. If at any point a client isn't happy with this process, we welcome them to move along to a provider that can better assist them, zero non-sense, zero lock-in.

Quick Note for Predatory Companies

If you are in a business in which you take advantage of your clients, stop being lazy, find another business model.

Back on point...

What are these companies doing so terribly wrong that they will lose so many customers shortly after signup?  This is the business of technology, it's organic, it's living, it's breathing, it's not the cleanest, it's not the easiest to understand, and it takes some serious work from both the vendor and the client to learn new processes and work together. 

If a vendor isn't willing to do the leg work to earn the customers trust by offering quality product and educating/informing their customers when appropriate, well, I suppose asking them to sign a weirdly long contract for a few bucks a month is a reactive and short term thinking solution to the problem.

And alternatively, if a client is also not interested in learning a small bit of technology, working with their vendors on solutions, and processing this field at least to a modicum of understanding, well it's quite reasonable it makes sense that the client will gravitate toward the predatory vendors.

Recommendations

Use Open Source Software where possible, and look for software components or libraries that are non-proprietary.

Stay very far away when companies tell you that you need to sign 2-5 year agreements to get already competitive prices even lower, this contractual obligation doesn't pass the smell test.

Work with ethical providers that help you plan for your future and have some stake in the game (e.g. - We get nearly zero feedback from large providers, yet our smaller providers regularly are willing to work with us on solutions to difficult problems. Capital seems to go much further with smaller providers.)