It's called Lock in.
Posted by Ian Holsman
Over at Techdirt, Mike wrote a interesting article about how doctors (and car park operators) are getting screwed over by their use of proprietary software.
I have no pity for them. It’s one of the first things (maybe the second.. how to do powerpoint is the first) they teach you in business school.. create a product with high switching costs and you will make it very difficult for your customers to leave.
But they also teach you what to do to circumvent these things as well. The easiest way is to know what these costs are before you sign (when you still have negotiating ability) and put terms in the contract to lessen them, or at least sign a long contract so the ability for them to screw you when it comes to renew is a long way away (and by that time you will have converted to something else).
Strategy / Negotiation is all about next best alternatives. You want to have several alternatives to your vendor, and make them have none except to deal with you.
what you learn @ business school is how to:
- identify the alternatives
- change the game so it works in your favour
- and to make powerpoints.