How to Avoid Software Vendor Lock-in and Account Control

People new to the field of lab computing may be unaware of the risk of vendor lock-in and account control in their purchase of software. According to the Wikipedia, vendor lock-in, also known as proprietary lock-in or customer lock-in, makes a customer totally dependent on a single vendor for products and services and unable to use other products without substantial switching costs. A recent article discussed how to avoid such a situation (see: How to Protect Against Vendor Lock-In). Below is an excerpt from it:

It appears that Oracle CEO Larry Ellison is aggressively either buying or putting out of business potential competitors. SAP and HP look to be his latest targets on the latter path and his goal appears to be total account control, that is, a situation in which one vendor single-handedly has an enterprise’s entire account....However, Oracle isn’t the only company going after this total account control concept. And given total account control often has historically led to account abuse, I thought it would be timely to revisit the defenses you have when a vendor gets this bug and then decides to abuse it....In the 1980s, IBM took advantage of their near total account control and, largely due to a long line of strategic mistakes, began to look at their customers less like partners and more like mines of money that could be plundered....One option [that can be pursued to avoid account control] is to freeze new purchases [from a single vendor] and expand on other platforms. This reduces the account control over time and you can increasingly use the very real threat to negotiate more favorable terms when you renew your licensing agreements. Your second option is to negotiate some flexibility for things like virtualization during initial contract negotiations or during renewals. You do have to look at credible competitive alternatives, but in this market you should be able to find strong migration offerings from competing vendors and seriously bring them into the process to give you negotiating leverage. You may have to do one or two competitive migrations before any dominant vendor gets the hint. But this will pay dividends long term and balance out the negotiating process....Don’t let any one vendor control your decisions because they will invariably eventually figure your budget is their piggy bank and begin abusive pricing practices. If you can remember and execute against this one rule you don’t really have to worry about any vendor taking significant advantage of you.

The lesson to be learned here is that you should never, never should allow a single vendor to dictate contract terms or the level of service to your lab. This can easily occur when you are running Brand X "wall-to-wall" in your lab. One remedy for vendor lock-in is obviously to contract with multiple vendors for various software components. This idea is cleverly referred to above as competitive migrations. Labs with aging LISs often install middleware or lab outreach software to provide the new and necessary functionality that they are seeking. This approach requires attention to system integration but it's well worth the effort. Support for such a strategy can be obtained from the vendors themselves or with the help of software consultants. This constitutes the best-of-breed strategy that I favor.

Contrariwise, a best-of-breed strategy runs counter to the "total enterprise solution" that is being pursued by many hospitals CIOs, particularly with regard to the deployment of the Epic EMR and Beaker LIS (see: Are You an Enterprise or Best-of-Breed CIO? Access to Cash May Make the Difference). As noted in this latter blog note, such a solution is being adopted primarily by hospitals with easier access to capital, which is a good thing. In the long run, they will need all the money that they can get their hands on because they are relinquishing all of their contract negotiating power.

Comments

[Slow PC]

Just gone through the aforementioned issue about vendor lock-in problem, which seems to be very grave and needs an urgent attention to get rid of such a thing where big giant (Like Oracle , IBM etc)are doing this. I am sorry to say but this seems to pathetic practice as dependency towards a single vendor means your freedom ends even if you do not like any product or service you will be trapped forever. Today when we much talk about independence and freedom in every aspect of life, this step seems to be a sort of exploitation and I think International standardizer such as IEEE or various other regulatory concern bodies should take an appropriate action to curb this kind of phenomenon in the beginning lest it may spread completely.

[Doug Mitchell, MD]

Has anyone successfully negotiated a "Beaker-less" contract with Epic that resulted in a reduced cost?