Vendor lock-in

In the British Isles, the term lock-in refers to an illegal gathering in a pub after the hours during which alcohol may be legally sold, where the landlord locks his guests in, dims lights and draws curtains to avoid the attention of the police.

Related Topics:
British Isles - Pub

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In economics, vendor lock-in, also known as proprietary lock-in, lock-in, or the Pottersville pattern, is a situation in which a customer is dependent on a vendor for products and services and cannot move to another vendor without substantial switching costs, real and/or perceived. By the creation of these costs to the customer, lock-in favors the company (vendor) at the expense of the consumer. Lock in costs may create a barrier to entry in a market that if great enough to result in an effective monopoly, may result in antitrust actions from the relevant authorities (the FTC in the US).

Related Topics:
Economics - Switching costs - Consumer - Barrier to entry - Monopoly - Antitrust - FTC

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Vendor lock-in is often used in the computer industry to describe the effects of a lack of compatibility between different systems.

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Different companies, or a single company, may create different versions of the same system architecture that cannot interoperate. Manufacturers may design their products so that replacement parts or add-on enhancements must be purchased from the same manufacturer, rather than from a third party (connector conspiracy). The purpose is to make it difficult for users to switch to competing systems. Examples include the several slightly different implementations of various open standards, the many variations of Unix, Microsoft Office's file formats, and also Microsoft's software in general.

Related Topics:
System architecture - Interoperate - Add-on - Open standard - Unix - Microsoft Office - File format - Microsoft

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This approach is not limited to the computer industry, however.

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For example, as of 2004 Sony digital cameras typically

Related Topics:
As of 2004 - Sony - Digital camera

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use add-in memory

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that can only be acquired from Sony, and this memory is typically

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much more expensive than alternatives available from multiple sources.

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Vendor lock-in for higher-end cameras takes the form of incompatible systems of lens mountings: a photographer

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who has purchased lens and other equipment from one manufacturer may find switching to a rival

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brand prohibitively expensive.

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Lock-in may eventually also be damaging to the company or industry in question. In the Unix wars, various Unix vendors battled so hard to lock their customers into their version of Unix that the entire Unix market was seriously affected. Sun Microsystems' unwillingness to open Java to external standardization bodies and the lack of multiple competing Java runtime implementations is widely held to be the reason Java has failed on the desktop.

Related Topics:
Unix wars - Unix - Sun Microsystems - Java

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One way to create artificial lock-in for items without it is to create loyalty schemes. For example, frequent flyer miles that can only be used with one airline create a perceived cost of switching airlines, as do supermarket "discount" cards.

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