Schneier on Lock-in

Published on: 2008-2-18

Home | Archive

Schneier on Lock-in


Bruce Schneier has this to say:

With enough lock-in, a company can protect its market share even as it reduces customer service, raises prices, refuses to innovate and otherwise abuses its customer base. It should be no surprise that this sounds like pretty much every experience you've had with IT companies: Once the industry discovered lock-in, everyone started figuring out how to get as much of it as they can.

Economists Carl Shapiro and Hal Varian even proved that the value of a software company is the total lock-in.


A big advantage with software is that because it is pure `brain-ware', many `technical' lock in's can be broken without too much difficulty. But what about other industries (say pharma) and in cases where the `lock in' is introduced via political/monetary/muscle power? (see this Wikipedia entry for a definition of `lock in' and some other interesting stuff. I think its essential to broaden the scope of the definition).

It's interesting to note Schneier's comments on libertarianism:

Lock-in is what you get when you have an unfettered free market competing for customers; it's libertarian utopia. Government regulations that limit lock-in tactics -- something I think would be very good for society -- is what's anti-libertarian.

The production of most of our basic needs - food, clothing, shelter - can be done locally by small businesses. What we are witnessing in this age of globalisation is the rise of huge businesses which are taking over all or part of the production/supply/distribution channels. The results are there for us to see - take some time to read some of the articles here - isn't it interesting that most of the mainstream media simply ignores stuff like this? Media too is now a `megacorp' and has only business interests to serve.

The Free Software movement has proved that it does not need monopolistic megacorps to create software for the people - lots of small businesses based on Free Software will prevent the IT `industry' following the lead of the pharma and agri industries. And maybe, the success of Free Software will in turn have some impact on these (and other) businesses. That's our hope for the future.

Pramode C.E

Tue Feb 19 05:17:47 2008

Thanks for dropping by, Jason!

Jason Rakowski

Mon Feb 18 18:35:03 2008

I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you. Jason Rakowski