Definition
Vendor lock-in is when consumers or companies become tied to one maker's technology or products, and switching to another company's becomes hard. Switching costs, such as compatibility problems and the cost of moving data, are so high that people keep using what they already have.
The hidden lock in coffee machines and printers
Some capsule coffee machines accept only the capsules made by that company. Even if you bought the machine cheap, if you want to try another company's tasty beans, you have to replace the whole machine. The machine and capsule shapes differ, so other companies' products don't fit.
Printers and ink work in a similar way. The printer itself is often sold cheap, while the ink cartridges made for it are sold at a high price. Sometimes a chip is built in to stop the printer from working with another company's ink.
Tying customers down tightly so they can't easily switch to another product is called a strategy of raising switching costs. The loss or hassle of switching is so big that people have no choice but to stay with what they have.
How smartphones and the cloud keep us tied down
In the world of information technology (IT), this happens on a much bigger and stronger scale. Think about switching your smartphone to another maker's.
If you have already paid for lots of apps, and your smartwatch and wireless earbuds are tied to one operating system, moving to another brand feels very heavy. Changing one device means buying the other devices and software all over again. Moving the photos and notes you have saved up over the years is also a big job.
The same thing happens in the cloud (computer servers you rent over the internet) that companies use. If you build software around one cloud company's own technology, moving to another server costs a fortune. In the end, customers have no choice but to grudgingly accept price hikes from their current provider or changes in its policies.
To be a little more precise: the price of convenience, and a way out
To be a little more precise, vendor lock-in is not always a company's sneaky trick. A lot of it comes naturally from the process of tuning technology. When a company builds products to its own standard, it's much easier to raise the connection speed and security level between different devices.
But if your dependence on one maker grows too large, serious risks follow. If that company has a server outage or shuts down a service on its own, it's hard to find an alternative. And you lose your bargaining power, because the provider can name any price.
That's why the tech industry has recently been actively adopting open standards, which aren't tied to any one company. It is also cutting lock-in risk by using containers, a software packaging technology that bundles a program together with its running environment so it can run unchanged on other clouds. Still, moving all the data you've piled up carries its own separate cost.
Common misconceptions
Vendor lock-in happens only at hardware companies that make machines.
It happens very often with hardware like smartphones and printers, but also with invisible software environments such as cloud services, operating systems, and business software.
It's a bad technology that companies create only to trick or trouble consumers.
It can also arise naturally while a company maximizes how well devices work together and improves security. The problem is that, in return for that convenience, it becomes hard to choose other options.
Where you meet it
Apple's smartphone, smartwatch, earbuds, and laptop are tightly connected, so it's hard to switch to an Android device.
A company wrote its program around one cloud provider's own database feature, so it can't move its servers to a cheaper cloud.
Someone bought a printer designed to recognize only official toner cartridges, so they have to keep buying expensive brand-name toner.
In one sentence
It's a state where you're tied to one company's products or services and can't switch to another because of the cost and hassle of moving.