vendor lock-in

A common rent-seeking practice where vendors design structures and contracts to give them control of customer data and code.

The steps involved in vendor lock-in are:

1) Identify lower-IQ management to engage with

2) Insert clauses into contracts where vendor retains customer data and limit customer access

3) Insert clauses into contracts where code development commissioned by the customer is proprietary to the vendor

4) Say whatever is necessary to ensure customer is at ease with the clauses, but ensure no such record
5) Sell customer's own data back to them, piecemeal

6) Resell the output of the code each time it is run

7) Collect economic profits

Vendor Staff: "The regulators of First Common Bank found evidence of overcharging . First Common needs us to pull account numbers on which customers got hit. I wrote up the query and pulled the data while I was on the phone."

Vendor Mgnt: "That's great. Let's write up a Statement of Work detailing requirements. Put in a long time frame for delivery, like a month or two. We'll price at your annual salary so it looks like we did some math. What is it again, like $127,400?"

Vendor Staff: "We can't charge that."

Vendor Mgnt: "Yes we can. Where else are they getting the data? They don't have it. I personally negotiated the vendor lock-in."

Vendor Staff: "We charged them $127,400 last time."

by human-natured December 12, 2019

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