Network Effect - Lock-in

Lock-in

Not surprisingly network economics became a hot topic after the diffusion of the Internet across academia. Most people know only of Metcalfe's law as part of network effects. Network effects are notorious for causing lock-in with the most-cited examples being Microsoft products and the QWERTY keyboard.

Vendor lock-in can be mitigated by opening the standards upon which users depend, allowing competition between implementations. This does not, however, mitigate industry-wide lock-in to the standard itself. Indeed, as there are now multiple vendors driving down the price and increasing the quality, more users are likely to adopt the standard thereby creating greater industry-wide lock-in to the standard.