The term vendor lock-in often has so many negative connotations – and it’s no different in the iPaas world. Regardless of the potential disadvantages, however, there are a number of important points which aren’t considered when talking about iPaaS vendor lock-in. For instance, have you considered that an integration strategy which aims at a long-term collaboration with an iPaaS provider right from the start can actually reap rewards?
The discussion around iPaaS providers & vendor lock in isn’t nuanced enough
The public discussion around vendor lock-in in the IT and software world as a whole and specifically for iPaaS tends to focus on providers trying to make their customers dependent on them; financially, contractually, or because of their technology.
It is argued that customers who have decided to use certain services from an iPaaS provider are then offered other services at a discount, often within a suite of iPaaS services. This progressively ties them to one provider, either contractually or through proprietary file formats. This makes switching to a different iPaaS provider at a later date difficult or even impossible.
That an iPaaS vendor lock-in can have disadvantages is not being disputed in this post. However, by focussing on the negative aspects, it is easy to overlook the fact that it can also have advantages. It is particularly important to recognise this as the solutions recommended for avoiding lock-in to a vendor are often rather impractical in practice.
At this juncture, it needs to be said that a certain level of dependency on an iPaaS provider often cannot be avoided, at least, not without high switching costs and extra work.
As a rule, the level of dependency increases with the extent and complexity of iPaaS services that a company uses. This happens whether or not an iPaaS provider actively attempts to lock in its customers. The reason is simply that an iPaaS is, directly or indirectly, interwoven into numerous other software solutions and processes within a company.
Open-Source-Software: vendor lock-in despite no vendor
A good example of how a lock-in can occur because software and processes are so interwoven is the use of open source software (the use of which is not being questioned here). Open source software is often recommended in order to avoid lock-in. At first, the arguments appear sound; as a rule, open source software is free to use with no purchase costs. There are no direct financial, propriatery or contractual ties. There is no commercial provider in the background who could be actively trying to make customers dependent on these products and services.
A number of companies however, particularly those which have been using open source solutions for a longer period of time, are surprised that later switching to other software or to another system is nevertheless strewn with difficulties. One of the reasons is that the more complex a software solution is, the more interlinked it is: this open-source software is interwoven into all the other software and processes in the company and its digital ecosystem. It’s these connections which lead to dependency.
Just as in the example with open source software, becoming dependent on an iPaaS provider happens automatically as the iPaaS solution is interwoven into your current software solutions and digital ecosystem. Solutions are integrated, mappings are written and various products are configured to fit. And this is particularly true for companies with sophisticated integration scenarios. You may well find that being tied to a provider in this way is a far stronger bond than and contractual or proprietary dependency.
iPaaS providers: financial incentives essentially outweigh the lock-in effect
Another point which is often overlooked is that any endeavours of iPaaS providers to achieve lock-in is often limited in practice. As a rule, iPaaS providers have a financial incentive to make switching to their integration services from the competition as easy as possible. As a result, they tend to keep an eye on what the competition is doing and work on solutions to facilitate a smooth potential switch to their own services. This of course serves to counter any attempts from an iPaaS provider to lock in their customers.
Vendor lock-in: the recommended methods for avoiding lock-in are not really feasible in practice
Furthermore, a number of recommendations made in industry journals and discussions on how to avoid being tied to an iPaaS provider are not overly feasible in practice. The following have all been suggested at some time or another:
- Switch iPaaS providers regularly
- In order to minimise the risk of lock-in, cover your company’s integration needs by using two or more iPaaS providers (who have as many of the same services in their range as possible)
- Have a back up provider in reserve to whom you could switch if at risk of becoming locked in.
In the discussion around these recommendations, the costs and effort involved in putting them into practice are only touched upon, if mentioned at all. As a solution grows in complexity, the feasibility of carrying out any of the above diminishes. It becomes clear that the majority of these measures intended to avoid vendor lock-in are really only economicaly viable if used with mainly standardised solutions, such as maybe the choice of internet provider.
Work with your iPaaS provider
Against this backdrop, there is an approach which can either avoid or at least strongly reduce the disadvantages of lock-in. It is less about avoiding lock-in by any means, rather about carefully choosing an iPaaS provider that would be suitable for a long-term partnership. This involves assessing yout integration needs as realistically as possible and choosing an iPaaS provider which can cover these needs to a high extent. Companies wishing to follow this approach will need to invest a relatively hign amount of time and energy in looking for and selecting a suitable partner.
Any switch from one iPaaS provider to another involves a lot of time, energy and effort, and may involve quite a bit of system downtime, too. Aiming at a long-term relationship with one single provider not only saves money but also makes planning easier.
When looking for a suitable long-term partner for your present and future integration needs, it’s worth looking at the advantages that a larger, established independent mid-sized company, such as those found in Germany’s primarily family-run Mittelstand can offer:
- Firstly, the risk of an established independent being bought up by a large concern is significantly lower than for a small provider or a start up.
- Secondly, established independents have generally been in business for so long that they are financially more robust than newer or smaller iPaaS providers. This is a significant factor in the reliability of an iPaaS provider with whom you are intending to work for a number of years.
- Thirdly, an established mid-sized company offers a broader range of services than a small provider.
- Fourthly, they have advantages when compared to large concerns which offer iPaaS services. The support and consulting services offered by an established independent tends to e more individualised, rather than being based on standardised solutions sold at great volume. Often, an established mid-sized iPaaS provider will have particular strengths such as in-depth experience of integrating existing systems, which large international providers can’t really offer.
- Fifthly, companies which decide on an established independent rather than a large, international concern to provide their integration needs often have more negotiating power and more flexibility in how their solution is designed.
As far as iPaaS is concerned, not only is there no reason to fear lock-in, there are even a number of advantages to having a long-term, experienced partner for your integration needs to take this complex issue off your hands.
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Written by: Dr. Martin KuntzDr. Martin Kuntz has worked for SEEBURGER AG since 2000, and is a member of the Board of Directors since 2015. His strengths lie in the Cloud, business applications, and the digitalization of specialty and technical business processes. He has degrees in physics and business administration. Earlier, he worked for several years in the Simulation department of the Karlsruhe Institute for Technology and for Airbus subsidiary Airbus Defence and Space.