The real cost of IoT vendor lock-in

The licence fee is the visible part of vendor lock-in. The larger costs sit in places that rarely appear in the budget: the data model you cannot take with you, the integrations priced per connector, and the exit project nobody planned for. Public organisations feel this hardest, because their systems must outlive any single contract.

The data model is the lock

Every platform models your sensors, your buildings, and your readings in its own way. After two or three years, your operational history exists only in that model. Leaving the platform means leaving the history, or paying to reconstruct it.

This is why the first question in any platform review is not about features. It is about the data model: where it lives, who defined it, and what a full export looks like.

Integrations priced per connector

A common pricing pattern: the platform is cheap, and every integration is a line item. Connecting a new sensor brand, a billing system, or a GIS costs extra, each time, from the same vendor. A municipality with fifteen departments and forty device types ends up paying for the platform many times over, one connector at a time.

An owned platform inverts this. Integrations are code in your repository, written once, reusable by any department.

The exit nobody budgeted

When the contract ends, three things happen at once. The data export turns out to be incomplete or in a proprietary format. The integrations stop working on a fixed date. And the replacement project has to run at the vendor’s pace, because the vendor controls the timeline.

Organisations that planned the exit at contract signing handle this in months. Organisations that did not handle it in years, or renew under pressure.

What the numbers look like

Integration and custom development consume 30 to 50 percent of digital budgets in asset-heavy organisations. In our reviews, most of that spend traces back to lock-in mechanics: connectors, migrations, and workarounds for data that should have been readable from the start.

Procuring your way out

Lock-in is a procurement outcome, so procurement is where it is fixed. Four requirements do most of the work:

• Data in open formats, with a complete export available at any time, at no cost.
• Code and documentation delivered to your repository during the project.
• A priced exit clause, with a defined transition period.
• Portable infrastructure, with deployment definitions as a deliverable.

We wrote a longer guide on writing IoT procurement requirements. If you have a platform decision or a renewal in front of you, our architecture review is a one-week second opinion with a written verdict, before you sign.