Own your AI: what lock-in really costs

What lock-in costs

Lock-in happens when a vendor makes it expensive or impossible to leave. It's not always intentional. It's often just the default.

A dental clinic in Kelowna built a patient reminder system with a vendor who owned the code. Two years later, the vendor raised prices 40 percent. The clinic wanted to switch. Moving the code to a new vendor took four weeks and cost $8,000. They paid the increase instead.

A distributor in Calgary stored customer data in a vendor's database. When they wanted to use a different tool, they discovered the data was locked in a format only the vendor could read. They spent three months rebuilding their customer list by hand.

A 12-person software company in Gastown signed a contract with a vendor who owned the accounts—the login, the API keys, everything. When the relationship soured, the vendor wouldn't hand over the account. The company had to rebuild their entire integration from scratch.

Each of these businesses is still running. None of them went under. But each one paid thousands of dollars they didn't expect to pay, and each one lost time they couldn't get back.

Three kinds of ownership

When you adopt AI, you control three things: the code, the data, and the accounts. Own all three.

Code. The code is the instructions that make the tool work. If a vendor writes custom code for you, you should own it or have a clear right to use it. That means you can read it, modify it, and move it to another vendor if you need to. If a vendor won't let you see the code, ask why. If they won't let you own it, walk away.

A plumber in Richmond built a scheduling tool with a vendor. The contract said the plumber owned the code. When the vendor went out of business, the plumber was able to hire a new developer to keep the tool running. Cost: one week of a developer's time. If the plumber had not owned the code, the tool would have died with the vendor.

Data. Data is the information the tool collects and stores: customer names, invoices, appointments, messages. You should be able to export your data in a standard format—CSV, JSON, a database backup—and move it to another tool or store it yourself. If a vendor says you can't export your data, that's a red flag.

An accounting firm in Burnaby uses a tool that reads invoices and files them. The contract says the firm owns the invoices and can download them at any time. If the firm leaves, they take their invoices with them. This took one conversation with the vendor before signing.

Accounts. The account is the login, the API keys, the subscription. It should be registered to your business, not to a person or consultant. If a consultant or vendor sets up the account in their name, you lose control. You can't change the password. You can't add team members. You can't cancel without their help.

A property manager in Surrey hired a consultant to set up an AI tool. The account was registered to the consultant's email. When the consultant left, the property manager couldn't access the account for three weeks. Now the account is registered to the property manager's business email, and the consultant has a team member role instead.

How to ask

Before you sign a contract, ask the vendor three questions.

One: Do I own the custom code you write for me. Listen for the word "own" or "licensed to you". If they say "we retain ownership" or "you license it from us", ask if you can modify it or move it. If they say no, ask why. If they still say no, consider another vendor.

Two: Can I export my data. Ask what format it comes in. Ask if there's a fee. Ask if you can do it yourself or if you need their help. If they hesitate, ask them to show you an export in writing.

Three: Who owns the account. Ask if it's registered to your business email. Ask if you can change the password. Ask if you can add or remove team members. If the answer to any of these is no, don't sign.

The trade-off

Ownership costs more upfront sometimes. A vendor who lets you own your code might charge more than a vendor who keeps it. A tool that exports data in standard formats might take longer to set up than a tool that locks it in.

But ownership is cheaper over time. You can switch vendors without rebuilding. You can hire a new developer without starting over. You can move your data to a better tool as your business grows.

The businesses that save the most money are the ones that can walk away.

Where to start

• This week, list the three AI tools or vendors you're considering. Write down what each one does and who you'd talk to if you wanted to leave. If you can't answer that, email the vendor and ask the three questions above.

• Ask your lawyer or accountant to review any contract before you sign. Tell them to look for ownership of code, data export rights, and account control. This takes an hour and costs $200 to $400. It saves thousands later.

• If you're already locked in, ask the vendor what it would take to own your code or data. Some vendors will negotiate. Some will charge a fee. Some will say no. At least you'll know what you're paying for.