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Diving overview:
- Companies that incorporate AI into their core operations and processes will Locked in to the AI system It may be difficult to change that, but IBM’s Business Value Institute revealed in a study based on insights from 1,000 senior executives announced earlier this month.
- more 7 out of 10 people answered The company said it would be difficult to switch from a major AI provider. another 68% A percentage of respondents said meeting data residency and sovereignty requirements would make it difficult to move AI systems and data between business environments.
- As AI adoption increases, so does the need for organizations to better manage and monitor their systems, Ana Paula Assis, IBM senior vice president and chair of IBM’s Europe, Middle East, Africa and Asia Pacific region, said in the study’s foreword. “AI has introduced new forms of dependencies that evolve faster than traditional governance, procurement, and technology cycles were designed to handle, which is why AI sovereignty is one of the most defining leadership issues of our time.”
Dive Insight:
The IBM Institute for Business Value research is not alone in pointing to enterprise concerns about vendor lock-in as more AI systems come online.
Research firm Forrester warned in a May blog post that changes to SAP’s API policies enacted earlier this month could limit third-party AI agents, large-scale data extractions, and other workarounds. Beyond SAP-approved routes. Additionally, the ERP giant is making Joule Studio 2.0 free for agents until Dec. 31 as a way to attract customers, “knowing that customers will inevitably pass through metered toll booths in 2027,” Forrester’s blog says.
“This is bigger than an IT integration issue and requires board attention,” Forrester analysts wrote. “Vendor management events related to budget and AI strategy with strategic partners at this level should be treated as such.”
Concerns about lock-in have attracted the attention of regulators.
of UK Competition and Markets Authority started investigating Microsoft’s business software ecosystem This year, there are growing concerns that AI adoption will entrench the tech giants’ customers. of The European Commission also said on Wednesday that Microsoft and Amazon should work together. appointed as gatekeeper Based on the Digital Market Law About cloud products.
“Both companies have vast and deep-rooted user bases and appear to benefit from large ecosystems, as well as lock-in effects and high switching costs,” the committee said.
Other vendors are Change your AI pricing strategy As companies adopt more. GitHub Starting this month, we started charging for the use of tokens. Workday and Zendesk We have changed our pricing structure based on AI features. AWS too raise the price This allows businesses to reserve accelerated compute instances for a future launch date.
Research from IBM’s Institute for Business Value positions AI sovereignty as key to helping businesses maintain control over their AI systems and reduce vendor dependence. Companies that have a high level of control over their AI systems often experience less downtime and can be “protected.” “AI-enabled disruption increases operating profits by 55%,” the study says.
However, only 7% of oOrganizations are reporting such levels of control, which IBM said shows a growing gap between companies with flexible AI systems and those “constrained by dependencies.” only 9% of companies Research shows they have a good understanding of AI vendor dependencies.
meanwhile 73% Although 80 of the executives surveyed said they intentionally deploy multiple AI vendors in their business environments, IBM found that this practice is driven less by strategy and more by operational realities such as the complexity of legacy systems.
“A multi-vendor strategy will only strengthen AI sovereignty if it is actively coordinated,” the study states. “This means establishing common standards for data, models, and security, defining where variance is tolerated and where consistency is required, and creating transparency across geographies and business units. This allows leaders to manage AI vendors as a strategic portfolio to optimize adaptability, resiliency, and long-term control.”
