Vendor lock-in is a situation in cloud computing where a customer becomes heavily dependent on a specific cloud provider due to various reasons such as technical aspects, contract terms, or other factors. This dependency can result in limited options for the customer to switch to another provider, even if the current provider is not performing well. This creates difficulties for customers who want to switch to a different provider, as it involves significant obstacles, expenses, and disruptions. Vendor lock-in can occur when a cloud provider uses proprietary technologies, formats, or interfaces that are not easily interoperable with other providers, making it difficult for the customer to migrate their applications and data. It can also result from exclusive licensing terms, complex integration requirements, or custom configurations that tie the customer to the specific provider’s ecosystem. This lack of portability and flexibility can limit the customer’s ability to adapt to changing needs or take advantage of competitive offerings, potentially impacting cost-effectiveness and innovation.

Company TechWay, a rapidly growing Software as a Service (SaaS) provider, initially selected Cloud Provider XYZ to host their application and oversee their cloud infrastructure. They were drawn by competitive rates, dependable services, and most features aligned with their needs.

Over time, TechWay integrated its application with Cloud Provider XYZ’s offerings, relying on databases, serverless functions, and AI services for data processing. However, challenges arose when their evolving needs exceeded Cloud Provider XYZ’s AI services. They turned to Cloud Provider ABC, which offered advanced machine learning options like natural language processing and image recognition (see Figure 1).

At this point, the vendor lock-in issue emerged. Shifting from Cloud Provider XYZ to Cloud Provider ABC would be intricate and time-intensive. They would need to modify their code, adapt data formats, and restructure workflows to align with Cloud Provider ABC. Furthermore, high data egress charges by Cloud Provider XYZ added to the migration expenses.

TechWay also faced the hurdle of their proficient developers specializing in Cloud Provider XYZ’s tools. Adapting to Cloud Provider ABC would require training or hiring new talent familiar with their ecosystem.

Cloud computing is marked by the arduous and costly process of transferring applications and data to alternate providers. Cloud software vendors employ various strategies to bind customers, such as creating systems that are incompatible with other vendor software, utilizing closed architectures or proprietary standards that lack interoperability with other applications, and imposing exclusive licensing conditions ^[6]. This practice dissuades organizations from embracing cloud technology, posing a formidable obstacle that demands substantial efforts to surmount ^[7].

As elucidated by ^[7], the mounting market demand and the quest for increased customer engagement exert pressure on cloud providers to prioritize interoperability—a direct advantage that circumvents the pitfalls of vendor lock-in. Prior studies have largely explored interoperability issues and the concerns tied to vendor lock-in. Numerous standardization solutions have emerged to enhance interoperability ^[8][9]. However, limited research has been devoted to a comprehensive investigation of vendor lock-in review and its implications for cloud computing adoption.

In cloud computing, vendor lock-in appears in different ways, such as technical lock-in, data lock-in, service lock-in, certification lock-in, contract lock-in, economic lock-in, and network lock-in (Figure 2). The technical lock-in occurs when a cloud service provider offers proprietary technologies, APIs, or data formats that are not easily transferable to other providers. Customers become dependent on these unique features, making it challenging to migrate to alternative platforms without significant redevelopment effort. For example, when the service consumer is using database solutions with cloud-specific functions.

In data lock-in, the data storage formats and structures are owned by the cloud providers. Cloud consumers should store their data in the specified formats, which makes it difficult to move these structured data to another service provider or to a different infrastructure. The migration of service consumer data will need transformation, which will increase the data migration complexities. Data transformation will lead to high costs and time-consuming processes. Service lock-in occurs when a service provider offers a wide range of services, such as analytical services, serverless computing, and machine learning. Service consumers who integrate these services into their applications will find it challenging to switch to another cloud provider because of the tight coupling with the provider’s system. For example, AWS Lambda functions are not easily transferable to Azure Functions or other cloud providers, such as Google. In certification lock-in, some industries require specific certifications or standards. The service consumer should follow the roles and standards listed in the cloud provider certifications. Switching service providers requires a re-evaluation of the roles and standards of the certification, which will be costly and time-consuming. Contract lock-in appears in many cases especially when it is a long-term contract with cloud providers. Most of the contracts have penalties and/or termination fees for early termination, making it financially challenging for service consumers to switch to another service provider. Over time, service consumers may invest heavily in a specific cloud provider’s ecosystem, which can lead to economic lock-in. This includes the direct costs associated with cloud services, the training of staff, the development of cloud applications, and the adoption of specific tools. The last type is network lock-in, which appears when the cloud providers offer a variety of networking services, and service consumers configure their network infrastructure to work with a particular provider’s services. Migrating to a new provider will require network re-configuring.

Mitigating cloud vendor lock-in involves careful planning, the use of open standards and technologies when possible, and adopting strategies like multi-cloud or hybrid cloud architectures. It is crucial for organizations to weigh the benefits of cloud services against the potential lock-in risks when making cloud-related decisions.