IoT and Vendor Lock-in

Posted on October 14, 2019

I was researching an idea last weekend and stumbled across something unexpected. My personal view on IoT has been that it provides a framework to support a rich ecosystem of hardware and software products. That flexibility and extensibility foster innovation, which in turn fosters greater use and ultimately adoption of the best products. It was quite a surprise to discover that IoT was being used to do just the opposite.

My initial finding was a YouTube video about “Tractor Hacking” to allow farmers to make their own repairs. That seemed like an odd video to appear in my search results, but midway or so through the video it made sense. There is a discussion about not having access to software, replacement components not working because they are not registered with that tractor’s serial number and that the only alternative is costly transportation of the equipment to a Dealership to have a costly component installed.

My initial thoughts were that there had to be more to the story, as I found it hard to believe that a major vendor in any industry would intentionally do something like this. That led me to an article from nearly two years earlier that contained the following:

“IoT to completely transform their business model”   and

“John Deere was looking for ways to change their business model and extend their products and service offering, allowing for a more constant flow of revenue from a single customer. The IoT allows them to do just that.”

That article closed with the assertion:

“Moreover, only allowing John Deere products access to the ecosystem creates a buyer lock-in for the farmers. Once they own John Deere equipment and make use of their services, it will be very expensive to switch to another supplier, thus strengthening John Deere’s strategic position.”

While any technology – especially platforms, has the potential for vendor lock-in, the majority of vendors offer some form of openness, such as:

• Supporting open standards, APIs and processes that support portability and third-party product access.
• Providing simple ways to unload your own data in at least one of several commonly used non-proprietary formats.

Some buyers may deliberately make the decision to implement systems that support non-standard technology and extensions because they believe the long-term benefits of a tightly coupled system outweigh the risks of being locked-into a vendor’s proprietary stack. But, there are almost always several competitive options available so it is a fully informed decision.

Less technology-savvy buyers may never even consider asking questions like this when making a purchasing decision. Even technologically savvy people may not consider IoT as a key component of some everyday items, failing to recognize the implications of a closed system for their purchase. It will be interesting to see if this type of deliberate business strategy changes due to competitive pressure, social pressure, or legislation over the coming few years.

In the meantime, the principle of caveat emptor may be truer than ever in this age of connected everything and the Internet of Things.