Vendor lock-in: What Kenyan enterprises should know before signing on the dotted line

Christopher Saul - Red Hat

By Christopher Saul, Territory Sales Lead for East Africa at Red Hat

When it comes to procuring and deploying IT solutions, enterprises often decide to go with a single supplier that looks perfect on paper. But what happens when the honeymoon’s over and they realise they’ve made a mistake? Or their needs shift and they need to switch?

Vendor lock-in refers to instances when an organisation cannot simply change to another vendor because of contractual or other reasons. It can be a real thorn in companies’ sides, especially when it comes to digital transformation.

Kenya is home to over seven million micro, small, and medium enterprises (MSMEs) that employ around 15 million people and account for approximately 40% of GDP. Many MSMEs are only just beginning their digital transformation journeys and as such, have limited capital, resources, and options when it comes to investing and deploying IT and cloud-based infrastructure. Therefore, they should think long and hard before restricting themselves to a vendor.

All locked up

Having a single vendor for all your digital needs, whether you’re an MSME or one of Kenya’s legacy institutions, is a tempting proposition. Single sourcing can reduce compatibility issues between solutions. It can decrease procurement time and cost, while also offering centralised accountability when incidents or errors occur. Managing a single service level agreement can seem simpler than managing several.

However, the cons can eventually outweigh the pros. The potential risks of vendor lock-in may manifest in several ways:

  • Customer dissatisfaction: Sometimes, what was promised on the box simply isn’t what’s inside. Enterprises can end up partially or wholly unsatisfied with the solutions and services they’re obtaining from their vendor. Contracts prevent them from going somewhere else, resulting in further breaking down of business relationships.
  • Unsustainable costs: Enterprises that choose a single vendor are at the mercy of their pricing. This is critical as, in addition to rising inflation rates putting pressure on Kenyan businesses, global economic challenges are making the tools and solutions those businesses need more expensive. Faced with potential price increases or undesired downsizing, they have to stick it out with their vendor, even if it’s to their long-term financial detriment.
  • Lack of security and compliance: Though vendors may seem to offer comprehensive solutions to protect an enterprise’s infrastructure and data, not all offer the flexibility that’s needed to keep up with cybercriminals and the latest developments in IT security. Vendors are not always able (or willing) to meet regulatory requirements or standards related to data protection and compliance (Kenya passed the Data Protection Act in 2019), putting enterprises in a difficult position, especially when it comes to customer data.
  • Frustrating restrictions: A vendor’s terms and conditions may prevent enterprises from innovating and unlocking new technological opportunities, or scaling operations according to their strategic needs. For instance, vendor lock-in is a major barrier to cloud computing adoption, something that is quickly becoming a necessity among Kenyan enterprises.

With those risks in mind, the question now becomes, what value could organisations reap with a multi-vendor approach?

The keys to success

A multi-vendor approach takes more time and consideration upfront than just going with one contractor. Whether they need software, cloud-based services, or hardware, enterprises must take a proactive role in selection and procurement. Here’s how that can pay off:

  • An edge over competitors: As Kenya becomes more digitised, businesses need to be ready for anything. With more oversight and control over their IT services and infrastructure, enterprises can be more flexible and respond more appropriately to their business needs and stay one step ahead of the competition.
  • The potential to innovate: As Africa’s “Silicon Savanah”, Kenya accommodates a thriving start-up ecosystem and a hotbed of innovation. So, it only makes sense that the tools businesses use reflect that ecosystem. The increased flexibility and scalability offered by using multiple vendors provides an opportunity to develop new products, reach new markets, and continue to grow.
  • Wider-spread support: Multiple accredited vendors who specialise and have expertise in the same solutions mean enterprises have options. The same goes for the solutions that they deploy.For example, enterprise open source software is supported by vendors as well as the community that surrounds and works on it. Constantly improving it and ensuring compatibility across as many environments as possible.

Organisations should carefully consider IT decisions with the help of trusted technology partners. Restricting themselves to a single vendor comes with long-term consequences. By taking a broader approach, considering multiple options, and actively engaging with Kenya’s IT landscape, they can unlock and be prepared for the future.

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