This is a dumbed-down version of how vendor lock-in works in the B2B world; only the prices and consequences can be much more severe. Today, we’ll show you what vendor lock-in is and how to avoid it in your business.
What is vendor lock in?
Vendor lock-in is when a company becomes dependent on a single vendor for products or services, making it difficult or costly to switch to another provider.
For example, you purchased an accounting tool five years ago because it had great pricing, a solid feature set, and integrations with your most used business tools.
Fast forward to 2025, and the tool hasn’t been updated with new features in over a year. Pricing plans have increased by 100%. They haven’t built new integrations in a while, and thanks to their proprietary data system, you can’t just switch vendors.
Also, you signed a contract that binds you until 2027.
In other words, that same vendor is costing you money and preventing you from growing your business.
Why does vendor lock in happen?
Vendor lock in happens when a cloud provider (un)intentionally designs a cloud platform that is difficult to break free from. There are several main reasons why vendor lock in happens to most businesses:
Proprietary technologies and systems
The vendor is selling technology that really only works within their ecosystem. For example, Apple users are strongly incentivized to stay within iCloud for their storage management. Switching to another vendor, such as Google Cloud, Dropbox, or similar, causes issues with other Apple devices and tools.
The cost of migrating your data somewhere else is too high in the required effort because all of the surrounding tech requires one platform (iCloud) to run things.
High switching costs
A great example of cloud vendor lock in comes from the CRM industry. Tools such as Salesforce require considerable investments in time and money just to get set up. You must build custom workflows, objects and automation for your specific product and customer base.
If you want to switch to other cloud providers in the CRM arena, this will be incurring significant fees as you’ll have to build out all the systems from scratch.
Lack of interoperability
This is a common cause of single vendor lock in. For example, Netsuite is a powerful cloud-based ERP that works well with other Netsuite products, such as Oracle Cloud and Oracle Database.
Assuming you wanted to use it with a tool such as HubSpot CRM, you may run into issues with data synchronization.
To avoid getting stuck with a single cloud provider and their network of apps, explore native integration and APIs before committing to a long-term payment plan.
Data ownership
Your cloud service provider may be the one who legally owns your data in the app. This becomes even more challenging when the particular cloud provider controls your customers‘ data, too.
In this case, the cloud vendor lock in means that migrating to a new system may not even be possible. If it’s a legacy system that has hosted your data for years, they can practically blackmail you into staying because you’ll have no other option.
Vendor lock-in for email verification tools
While email verification isn’t prone to vendor lock-in as some other applications, it can still happen. If you feel like your current email validation tool is giving you an okay treatment but you can’t switch because of some reason, there is a chance that you’re already locked in. Here’s how.
Specific export formats: ideally, you should get an exported list of verified emails in a format that’s easy to upload in your favorite email marketing tool or one that you can open with Excel or a similar tool. For example, .CSV.
Exclusive integrations: your email verification tool has an integration with your favorite email marketing tool that you can’t access through other providers.
Volume-based pricing: the verification tool of your choice gives you a serious discount for a large volume of verified emails.
Long-term contracts: some email validation vendors force businesses into complex, long-term contracts that prevent them from switching to a more affordable alternative.
With tools such as Bouncer, you don’t face any of these issues as you can start and stop using Bouncer at your convenience. The pricing is transparent, and so are the integrations and the end results you get, no matter which pricing plan you opt for.
The risks of vendor lock-in
Besides the obvious risk of being unable to switch your cloud provider, there are other, bigger challenges to be aware of.
Higher costs
Once a cloud provider realizes that its customers don’t have a choice other than staying with them, they can decide to get cheeky. If the customer can’t switch vendors, the provider keeps upping up the price because the customer can’t say no.
Innovation stagnation
You’re limited by the product roadmap of a specific provider. In other words, multiple cloud providers could have better, newer features, and yours could refuse to invest, e.g., in artificial intelligence and language learning models.
Consequently, your competition moves faster because they’ve chosen a cloud computing business that wants to invest in product development.
Reduced negotiation power
When one cloud vendor dominates the market, they make it practically impossible to avoid vendor lock in. There are few alternatives to consider, which means you have no leverage in negotiating a way out or a price reduction.
How to avoid vendor lock in: a practical guide
If you want to save yourself from headaches and significant costs that come with vendor lock in, you can get prepared in advance with our guide.
Choose open standards and interoperable solutions
When you purchase platforms that use proprietary systems and formats, it creates a dependency on other elements in that system.
For example, if you use Hubspot’s marketing suite and want to track marketing-qualified leads from your website, you’ll likely have to purchase the Hubspot Content Hub.
If you want to avoid vendor lock in, choose systems that adhere to open standards (e.g., OpenAPI, SQL, OAuth). Prioritize apps with APIs to easily connect with third-party tools with minimum development effort.
Other tips include:
- Look for vendors that promote data portability and offer export options in widely accepted formats (CSV, JSON, etc.).
- Favor vendors with strong compatibility across multiple ecosystems (e.g., Linux, Windows, Mac).
- In cloud environments, consider platforms supporting multi-cloud (AWS, Azure, Google Cloud) setups.
Look for modular and microservices architecture
A modular architecture means that the software you use is built up of smaller building blocks. For example, a CRM could have a module for chat, another one for contact management, a separate one for email, etc. The elements in a modular architecture can be swapped out and removed easily without disrupting the entire system.
This is the opposite of a monolithic architecture, where the entire software is one building block. In this setup, you can’t change smaller building blocks. You can only change the entire ecosystem, which is how vendor and technology lock in happens.
To benefit from modular and microservice architecture, look for headless setups where the front- and back-end interfaces are separated, and you can freely change vendors if you’re no longer satisfied with them.
Plan a clear exit strategy from day one
Before you commit to anything, ask the vendor questions about switching to someone else along the way. Specifically, ask about:
- The ease of transferring data and data migration to a different provider
- Potential exit fees
- Contract termination terms
- The possibility of regular data exports and backups to ensure data portability
If you can negotiate your contract terms, try to create a flexible setup where you can escape without incurring significant costs, all the while saving your data.
Adapt a multi-vendor approach
Where it’s possible, use a multi cloud strategy and spread your data and operations across multiple platforms.
For example, deploy workloads across AWS and Azure.
You can also implement hybrid solutions that combine on-premises and cloud infrastructure to prevent over-reliance. This prevents data lock in (in the cloud or on the server) and gives you a backup should things go south.
Look for open-source and community-driven solutions
Opting for open-source reduces your chances of vendor lock in because the underlying technology is commonly available.
Where it’s possible, consider open-source alternatives for software (e.g., PostgreSQL vs. Oracle DB, Linux vs. Windows). Even if you’re forced into switching providers, you’ll have an easier time finding one with a similar setup.
When choosing a particular provider with an open-source system, opt for those with large and vibrant communities. This lets you troubleshoot if you get stuck, and you’ll have peace of mind that development won’t suddenly stop.
Evaluate vendors for long-term viability
To prevent vendor lock in, do your research before committing to a company, especially if it’s a crucial piece of tech such as CRM, email marketing or help desk tool. Review their:
- Product roadmap: what features do they have planned out for the future? When do they plan to ship them?
- Market reputation: do they stand behind their words and deliver on their promises?
- Financial stability: how much runway do they have? Are they bootstrapped or backed by investors?
- Technology updates: do they use the latest tech, or are they still stuck in the 2000s?
- Vendor acquisitions: have the founders previously sold their products to bigger companies?
While this won’t necessarily help with your particular cloud provider, it will help you spot red flags early on.
Conclusion
Vendor lock in can be a snowball that slowly creates an avalanche that collapses your business. If you choose the wrong platform, especially one crucial for building up your business, you could harm your revenue, productivity, and prospects for the future.
With Bouncer, you don’t have to worry about your or your customers‘ data or getting locked into a contract. We simply take your emails, verify them, and tell you which ones are valid. With SOC-2 certification and GDPR compliance, your data is in safe hands, and you can use it with any email marketing app you want.
