Lock-in 27#
Customers are locked into a vendor's world of products and services. Using another vendor is impossible without incurring substantial switching costs, and thus protecting the company from losing customers. This lock-in is either generated by technological mechanisms or substantial interdependencies of products or services.
Examples: Iconic Cases
How they do it: By providing the most used operating system for personal computers, Microsoft has the advantage to create an environment which prefers their other software solutions such as Internet Explorer or the Office package over competing products. Also, the programs on a Microsoft operating system are ususally not compatible with other operating systems from companies such as Apple or Linux. Hence customers have a barrier to switch to another operating system as they would loose their software programs.
Learn more about Microsoft →
How they do it: Companies relying on Salesforce’s software are tied into the ecosystem. Switching to a new provider might be associated with considerable cost and efforts, and thus, customers experience a lock-in situation.
Learn more about Salesforce →
How they do it: Through their Google Playstore, the company offers both content and apps for its customers. However, these can only be used on the respective environments and not be transferred to other environments. Hence, once the customer is used to the service and has purchased a lot of content or apps, the switching costs are very high.
Learn more about Google →
How they do it: LinkedIn has several mechanisms in place to keep the communication and exchange between users on their platform. One example is that it is not possible to send email adresses in initial contact requests for free users. In addition, the platform’s value to the individual user grows with its network, increasing the barrier to switch to another network.
Learn more about LinkedIn →
How they do it: Data lock-in risks become evident when you need to move your data from one software vendor’s systems or servers to another. Companies using SAP’s software are locked in to the SAP ecosystem and may face difficulities in organizational rigidity and switching costs when deciding to switch to a competitor’s system, leading to a competitive advantage of SAP.
Learn more about SAP →
Below, the top industries for the pattern "Lock-in" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 5 firms using this pattern.
Top Industries
18% of firms using pattern
14% of firms using pattern
14% of firms using pattern
All Industries
Below, the pattern "Lock-in" is analyzed based on co-occurrence, in order to get insights into how this business model pattern is applied in combination with other patterns within the firms we studied.
Top Co-Occurrences
8 pattern co-occurrences
6 pattern co-occurrences
6 pattern co-occurrences