Lock-in is the new lock-out

What is 'lock-in'? Lock-in is the use of proprietary formats as a way of retaining customers. Microsoft does this with their MS-Word and MS-Excel file formats. The formats are closed, known only to Microsoft and those companies they choose to include in partnerships. But Microsoft is only one example, and I'm not going to pick on Microsoft.

The problem is not limited to Microsoft, and not with Microsoft. The problem is the idea: Lock customer data in a format (or a "prison cell") where only the software from one vendor can read it (has the "key" to unlock the "cell").

So passe! So twentieth century!

Locking data inside an application relies on trust (or naivete) on the part of the customer. A long time ago, IBM salespeople would meet with businessmen, review their use of IBM mainframes and peripherals, and then decide on the next 'generation' of equipment that the business should use. The IBM sales team decided this, alone, not with the customer company. They would then present their recommendations to the customer and frequently the customer would buy everything recommended. The customer trusted the IBM team to recommend the right equipment. (And probably did not have the expertise to disagree.)

Those days are gone. Today, customers for mainframes are savvy and have a keen eye on expenses. And they can pick from a variety of mainframe vendors. When your customers have options, they will pick those options that favor them.

Customers don't (necessarily) want open standards... but they do want to move information from one place to another. Whether documents, spreadsheets, databases, or .mp3 files, customers want to use their data in multiple places, with multiple applications. And they become frustrated when they cannot.

Locking data into a proprietary format can be done when you have a monopoly or near-monopoly. Microsoft has done well with its Office suite, where data is locked inside difficult, if not opaque, file formats. And while some groups have had modest success reverse-engineering those formats, there is always the spectre of incompatibility. The lure of 'file format compatibility' has kept many customers in the Microsoft camp. But a good portion of them chafe. They will jump ship when a new option appears on the horizon. (Some of them will jump simply to get away from the oppressor. But the reason doesn't matter... they leave.)

Microsoft is big and has a commanding presence in the market, and even they have felt the pressure to open their formats. Smaller companies, or companies with smaller market shares (and those companies without 'market power') would be well advised to stay away from the 'lock-in' strategy. It is better to compete on features, usability, and performance.

Of course, that's harder than designing an opaque file format. But I didn't say it would be easy.