Basics on risks of Cloud Vendor Lock-In
There are four primary lock-in risks that you’ll take working with a single cloud provider. These include:
- Data transfer risk
- Application transfer risk
- Infrastructure transfer risk
- Human resource knowledge risk
Many companies today are choosing a platform strategy as part of IT Transformation. The idea behind it is similar to core enterprise services or enterprise strategies of the past. Where you build a strategic capability and find ways to reuse this across the company for multiple business cases. While this makes sense if 1+1=2 but this isn’t how companies work. Platform strategies may actually cost more in the long run.
Here are a few thoughts to consider:
1)Platform is designed for many things and may not do any one thing specifically well.
2)Platform changes so quickly that it impacts business across the whole company instead of one or few business units.
3)Platform cloud providers give a sweetheart deal up front but are non-negotiable in the next contract cycle.
One of the greatest risks to consider is 4th party services. Cloud providers want to lower costs just like you do. They outsource their own services. The problem is the agreements for delivery and continuity of services are a chain of trust / contract. Imagine this..
The services and contracts for delivery are stacked and there is a dependency relationship that you do not know about or understand until a failure occurs.
In consideration, you may be locked into a vendor based on a new organizational platform strategy and partnership. This partnership has multiple dependency points of weakness with 3rd and 4th party providers that you may have never even know about. This creates business risk and costs associated with new business continuity modeling. The idea of going to the cloud was many fold but most CIO’s are looking for lower costs better options of capabilities through a shared value use case. While they may see run / Cap and Op go down in excel targets. The total cost of operations won’t meet the hunger of the street. The estimated savings are practically guaranteed to be offset by operational “misses” in run activities. Ask any CIO that used to have leverage by differentiation if large co cloud providers are willing to give them a break on their platforms and services one they are in their container. Something to think about if you are going to the cloud.