Technology Lock-in

Extracted Attributes

• Aliases

  Vendor lock-in, Proprietary lock-in, Customer lock-in

• Consequences

  Barriers to market entry, Antitrust concerns, Monopoly, Reduced flexibility, Potential price increases, Dependency on vendor's roadmap and stability, Hindering transitions to potentially superior technologies

• Core Concept

  Customer dependence on a specific vendor or technology, making switching costly and difficult

• Mechanisms/Causes

  Self-reinforcing mechanisms, Increasing returns to adoption, Network effects, Learning curves, Significant investments in complementary technologies/infrastructure, Proprietary technologies, Unique service ecosystems, Long-term contracts, High switching costs

• Current AI Context

  Massive investment in GPU infrastructure, Dominated by Nvidia H100 chips, Limited AI ROI

• Mitigation Strategies

  Open standards, Alternative choices, Hardware diversity

• Academic Inquiry Start

  Mid-1980s

• Primary Application Areas

  Technology industry, SaaS industry, AI sector

Timeline

• Academic inquiry into technological lock-in begins to grow, with early works by economists, historians, and sociologists like David (1985) and Arthur (1989). (Source: web_search_results)

  1985-XX-XX

• Richard Perkins publishes a paper titled 'Technological lock-in' for the International Society for Ecological Economics, contributing to the academic discourse. (Source: web_search_results)

  2003-02-XX

• Concerns about technology lock-in in the AI sector become prominent, driven by massive investments in GPU infrastructure, particularly Nvidia's H100 chips, and a perceived lack of AI ROI and hardware diversity. (Source: document 959aa5af-793e-4ed6-8fcf-daf30b27fb0f)

  2024-XX-XX

Vendor lock-in

In economics, vendor lock-in, also known as proprietary lock-in or customer lock‑in, makes a customer dependent on a vendor for products, unable to use another vendor without substantial switching costs. The use of open standards and alternative options makes systems tolerant of change, so that decisions can be postponed until more information is available or unforeseen events are addressed. Vendor lock-in does the opposite: it makes it difficult to move from one solution to another. Lock-in costs that create barriers to market entry may result in antitrust action against a monopoly.

Web Search Results

• Technological Lock-In → Term - Pollution → Sustainability Directory

  Technological Lock-In, in academic discourse, is rigorously defined as a state where the trajectory of technological development becomes constrained or ‘locked-in’ to a particular path due to self-reinforcing mechanisms and increasing returns to adoption. This designation implies that alternative technological paths, even if potentially more efficient, sustainable, or socially beneficial, become progressively difficult to realize because of the accumulated advantages of the incumbent [...] To put it plainly, Technological Lock-In occurs when users become so reliant on a specific technology that they find it hard to switch to alternatives, even if those alternatives are better or cheaper in the long run. This reliance is built up through various factors, often including network effects, learning curves, and significant investments in complementary technologies or infrastructure. The initial choice of technology sets a path that becomes harder to deviate from as time progresses. [...] Academically, Technological Lock-In is understood as a complex socio-technical process where self-reinforcing mechanisms create path dependencies, hindering transitions to potentially superior technologies and impacting sustainable development.

• [PDF] Technological “lock-in

  particularly in relation to the pollution externality from fossil fuel use (Kemp, 1994; Rip & Kemp, 1998; Unruh, 2000). Central to the idea of lock-in is that technologies and technological systems follow specific paths that are difficult and costly to escape. Consequently, they tend to persist for extended periods, even in the face of competition from potentially superior substitutes. Thus, lock-in is said to account for the continued use of a range of supposedly inferior technologies, ranging [...] International Society for Ecological Economics Internet Encyclopaedia of Ecological Economics Technological “lock-in” Richard Perkins February 2003 1. Introduction Technological “lock-in” has been the subject of growing academic enquiry by economists, historians and sociologists since the mid-1980s (David, 1985; Arthur, 1989; Cowan, 1990; Liebowitz & Margolis, 1995). More recently, it has caught the attention of scholars interested in the links between technological and ecological change, [...] reinforced by a third type of increasing return, adaptive expectations, whereby increased adoption reduces uncertainty about the performance, reliability and durability of a technology. Yet, it is a fourth and final class, network externalities, that is most commonly associated with technological lock-in. Network externalities are the external benefits conferred on users of a technology by another’s use of the same technology. Their significance stems from the fact that technologies are more

• Vendor Lock-in Explained: What It Means for Your Business

  Vendor Lock-in, also known as proprietary lock-in or customer lock-in, refers to a situation where a customer becomes dependent on a vendor for products and services and cannot easily switch to another vendor without substantial costs or inconvenience. This concept is particularly prevalent in the technology and SaaS industries, where switching between different platforms or services can involve significant time, resources, and technical challenges. [...] The roots of vendor lock-in can be traced to the early days of the technology industry, where proprietary systems and software were the norms. Vendors designed their products in such a way that they were incompatible with competitors’, creating a barrier for customers wishing to switch providers. Key components of vendor lock-in include proprietary technologies, unique service ecosystems, long-term contracts, and high switching costs. [...] In the context of SaaS and technology, vendor lock-in can be seen in various forms, such as exclusive reliance on a specific cloud provider, use of proprietary software that doesn’t support interoperability, or long-term service agreements that are expensive to terminate. While it can offer initial convenience and integration benefits, it also poses risks like reduced flexibility, potential price increases, and dependency on the vendor’s roadmap and stability.

• Locked in: what is linear lock-in and how can we break free?

  In the same era, academics studying technological innovations used the term lock-in to describe the peculiar endurance of dominant technologies, despite the emergence of better alternatives. The economist W Brian Arthur argued that “modern, complex technologies often display increasing returns to adoption, in that the more they are adopted, the more experience is gained with them, and the more they are improved.” As the technology improves, adoption rises further, and political, technological [...] As well as existing industries, lock-in can foreshadow emerging ones. For example, in Denmark, investment has been ploughed into ‘clean’ waste-to-energy incinerators, which looked appealing as a clever way to generate power from waste once recycling options have been exhausted. Incineration now accounts for 5% of electricity generation and about 20% of district heating. Investment into such infrastructure can have a payback of several decades, which has committed the country to the technology,

• Locked In - Medium

  The Lock-in Effect occurs when a customer becomes so entrenched in a particular product or service that they find it difficult, if not impossible, to switch to an alternative. Businesses that deliberately design their offerings to create barriers to switching, such as high switching costs, proprietary technologies, or network effects, often create this effect.