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Business & Information Systems Engineering
Published in: Business & Information Systems Engineering 4/2022

12-01-2022 | Research Paper

Security-Induced Lock-In in the Cloud

Author: Daniel Arce

Published in: Business & Information Systems Engineering | Issue 4/2022

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Abstract

Cloud services providers practice security-induced lock-in when employing cryptography and tamper-resistance to limit the portability and interoperability of users’ data and applications. Moreover, security-induced lock-in and users’ anti-lock-in strategies intersect within the context of platform competition. When users deploy anti-lock in strategies, such as using a hybrid cloud, a leader–follower pricing framework increases profits for cloud services providers relative to Nash equilibrium prices. This creates a second-mover advantage, as the follower’s increase in profits exceeds that of the leader owing to the potential for price undercutting. By contrast, introducing or enhancing security-induced lock-in creates both an increase in profits and a first-mover advantage. Cloud services providers therefore favor security-induced lock-in over price leadership. More broadly, we show why standardization of semantics, technologies, and interfaces is a nonstarter for cloud services providers.
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Footnotes
1
Here the cloud network effect is collectively within user groups, as identified by Opara-Martins, Sahandi, and Tian (2016), rather than between user groups.
 
2
The upper bound on P12, V1 − λ1V + P21, is positive. A negative upper bound results if λ1 > (V1 + P21)/V. As V1 > V, and the second-period equilibrium occurs in the positive orthant of the (P21, P22) plane, λ1 > (V1 + P21)/V > 1. But λ1 is a probability and a probability cannot take a value greater than 1, thereby establishing a contradiction.
 
3
Strategic complements has nothing to do with whether users view the associated goods or services as complements (e.g., apps and CSPs) or substitutes (e.g., CSPs in a given layer of the cloud stack).
 
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Metadata
Title
Security-Induced Lock-In in the Cloud
Author
Daniel Arce
Publication date
12-01-2022
Publisher
Springer Fachmedien Wiesbaden
Published in
Business & Information Systems Engineering / Issue 4/2022
Print ISSN: 2363-7005
Electronic ISSN: 1867-0202
DOI
https://doi.org/10.1007/s12599-021-00729-5

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