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LEAVE - Exit Strategy

Can you exit gracefully?

Your ability to leave a vendor is your negotiating power. Lock-in isn't just inconvenient—it's a strategic vulnerability. Vendors who make it easy to leave are confident in their value. Vendors who make it hard are betting you'll be too trapped to escape.

What "LEAVE" Means​

The LEAVE criterion evaluates:

  1. Data Portability: Can you export all your data in usable formats?
  2. Knowledge Retention: Can you preserve institutional knowledge embedded in the system?
  3. Migration Paths: Are there clear paths to alternatives without starting over?
  4. Configuration Export: Can you export prompts, settings, and customizations?
  5. Vendor Independence: Can your team operate without vendor support?
  6. Contract Terms: Are you free to leave or trapped by penalties and obstacles?

Why Exit Strategy Matters​

Your Ability to Leave is Your Leverage​

Direct Version: The moment a vendor knows you can't leave, pricing becomes negotiable in only one direction—up. Lock-in is a business model. Some vendors build great products to retain customers. Others build cages. Know the difference before you're trapped inside.

Suitable for Work Version: Organizations with viable exit options maintain negotiating leverage:

  • Competitive pricing pressure remains effective
  • Service quality stays high because the vendor must earn retention
  • Contract negotiations occur from a position of strength
  • Strategic flexibility enables adaptation to changing needs

Lock-In is Often Invisible Until It's Too Late​

Direct Version: Switching costs don't come from contracts. They come from data in proprietary formats, prompts you can't export, fine-tuned models you don't own, and processes built around vendor limitations. By year two, migrating might cost more than the original purchase. That's not an accident—it's the business model.

Suitable for Work Version: True lock-in accumulates gradually through:

  • Proprietary data formats without export capability
  • Institutional knowledge embedded in non-portable configurations
  • User training and muscle memory specific to vendor UX
  • Process optimizations that assume vendor-specific capabilities
  • Integration dependencies on vendor-controlled APIs

Vendors Who Fight Exits are Admitting Something​

Direct Version: If a vendor's value proposition is "we make it easy to start but expensive to leave," that tells you everything. Confident vendors make data export trivial because they know their ongoing value justifies retention. Scared vendors erect barriers because they know you'd leave if you could.

Suitable for Work Version: Exit friction reveals vendor confidence in ongoing value delivery:

  • Strong vendors invest in customer success, not retention barriers
  • Weak vendors optimize for switching costs rather than product quality
  • Exit policies signal whether the relationship is partnership or exploitation

What Good Exit Strategy Looks Like​

Excellent (Green)​

A vendor with strong exit capability provides:

✅ Complete Data Export: All data exportable in standard formats (JSON, CSV, Markdown)

✅ Configuration Portability: Prompts, settings, and customizations exportable and portable

✅ Knowledge Transfer: Documentation sufficient for team to replicate setup elsewhere

✅ Standard Formats: Uses industry standards, not proprietary formats

✅ No Lock-In Terms: Contract allows exit without penalties after reasonable notice

✅ Migration Support: Vendor helps with migration, doesn't obstruct it

✅ Graceful Degradation: Can operate in read-only mode during transition

Example: "Export all data via API or UI in JSON/CSV/Markdown. System prompts downloadable. Configurations stored in YAML. 90-day termination notice with no penalty. Migration assistance included. Read-only access for 60 days post-termination."

Acceptable with Caveats (Yellow)​

A vendor with partial exit capability:

⚠️ Data export available but may require vendor assistance

⚠️ Some configurations exportable, others proprietary

⚠️ Migration possible but documentation is limited

⚠️ Standard formats for data but proprietary formats for configurations

⚠️ Contract has termination penalties but they're reasonable

Example: "Data export via support request in JSON format. Prompt templates available but may need adaptation. 180-day notice required. Early termination fee: 25% of remaining contract value. 30-day transition assistance."

Unacceptable (Red)​

A vendor with poor exit capability:

❌ No data export or only raw logs without structure

❌ Prompts and configurations not exportable ("proprietary")

❌ No documentation for migration

❌ Proprietary formats with no converters

❌ Severe contract penalties make exit economically unfeasible

❌ Vendor actively obstructs migration attempts

❌ Data deleted immediately upon termination

Example: "Data export available as raw text dump. System prompts are proprietary and cannot be shared. 12-month termination notice required. Early termination penalty: 100% of remaining contract value. No migration assistance. Data purged immediately upon termination."

Evaluation Questions​

When evaluating exit strategy, ask:

Data Portability​

  • Q: Can I export all data, including metadata and relationships?
  • Q: What formats are supported (JSON, CSV, Markdown, etc.)?
  • Q: Can I automate exports via API?
  • Q: Is export self-service or does it require vendor involvement?

Configuration Portability​

  • Q: Can I export system prompts in plain text or structured format?
  • Q: Are configurations in standard formats (YAML, JSON) or proprietary?
  • Q: Can I export workflow definitions and customizations?
  • Q: Do you provide conversion tools for alternative platforms?

Knowledge Retention​

  • Q: Is your documentation sufficient for my team to replicate the setup?
  • Q: Are system architectures and decision logic documented?
  • Q: Can I retain access to documentation post-termination?
  • Q: Do you offer knowledge transfer sessions during offboarding?

Migration Support​

  • Q: Do you provide migration assistance or documentation?
  • Q: Have you helped other customers migrate to alternatives?
  • Q: Can I maintain read-only access during transition?
  • Q: Will you help troubleshoot migration issues?

Contract Terms​

  • Q: What's the termination notice period?
  • Q: Are there early termination penalties? How much?
  • Q: What happens to data after termination?
  • Q: Can I negotiate flexible exit terms?

Vendor Independence​

  • Q: Can my team operate the system without vendor support?
  • Q: Is documentation comprehensive enough for internal maintenance?
  • Q: Do I have access to all system configurations?
  • Q: What functionality breaks if vendor goes away?

Red Flags​

Watch out for vendors who:

🚩 Refuse to export prompts, calling them "proprietary intellectual property"

🚩 Use proprietary data formats with no standard export options

🚩 Require vendor involvement for basic data exports

🚩 Delete data immediately upon contract termination

🚩 Have termination penalties > 50% of remaining contract value

🚩 Provide no migration documentation or assistance

🚩 Make exit so painful customers stay out of exhaustion

🚩 Lock you into multi-year contracts with no escape clauses

Why Vendors Create Lock-In​

What they say: "Our integrated approach delivers superior value that can't be replicated."

What it often means:

  • They know their product isn't differentiated enough to retain on merit
  • Revenue model depends on captive customers, not happy ones
  • They're protecting against customers discovering simpler alternatives
  • Executive compensation is tied to retention metrics
  • They're preparing for acquisition and need high retention numbers

The truth: Customer retention should come from delivering ongoing value, not from making exit painful.

Best Practices for Procurement​

During Evaluation​

  1. Test Export: Request full data export during pilot and verify usability
  2. Review Export Formats: Ensure standard formats, not proprietary blobs
  3. Request Documentation: Evaluate migration documentation quality
  4. Talk to Former Customers: Ask why they left and how difficult it was
  5. Review Contract Terms: Scrutinize termination clauses and penalties

In Contracts​

  1. Guarantee Export Rights: Contractual right to export all data in standard formats
  2. Limit Penalties: Cap early termination fees at reasonable levels
  3. Extend Transition Period: Negotiate read-only access post-termination
  4. Require Migration Support: Vendor obligation to assist with migration
  5. Data Retention: Specify how long data is retained after termination
  6. Specify Export Formats: List exact formats that must be supported

Post-Deployment​

  1. Test Exports Regularly: Quarterly verification that export works
  2. Document Your Setup: Maintain internal documentation of configurations
  3. Store Configurations: Keep copies of prompts and settings externally
  4. Plan Exit Strategy: Annual review of alternative vendors and migration paths
  5. Monitor Lock-In: Track increasing dependencies that would complicate exit

Real-World Impact​

Case Study: Export Nightmare​

Scenario: Company wanted to migrate to better AI platform. Vendor provided "data export" as 10GB of unstructured text files with no schema.

Outcome: 6 months and $300K to clean, structure, and migrate data. Migration costs exceeded 3 years of original vendor fees.

Lesson: Test data export early and verify it's actually usable, not just technically available.

Case Study: Prompt Lock-In​

Scenario: Company spent 18 months optimizing system prompts. Decided to switch vendors. Original vendor refused to export prompts ("proprietary intellectual property, licensed not owned").

Outcome: Had to reverse-engineer prompts from logged queries. Some institutional knowledge lost. Took 4 months to reach previous quality level.

Lesson: Clarify prompt ownership in contracts. Export and store externally from day one.

Case Study: Contract Trap​

Scenario: Vendor performance degraded. Company wanted to terminate. Contract required 12-month notice plus 50% early termination penalty.

Outcome: Stuck with underperforming vendor for 12 more months while building replacement internally. $500K in wasted fees.

Lesson: Negotiate termination terms before signing. Performance-based escape clauses protect against vendor degradation.

Case Study: Graceful Exit Done Right​

Scenario: Company outgrew vendor's capabilities and found better alternative. Original vendor had good exit terms.

Outcome: Exported all data in JSON format via API. Received 60 days read-only access. Vendor provided migration checklist. Completed migration in 3 weeks with zero data loss.

Lesson: Vendors confident in their value make exit easy. Choose those vendors—they're usually the ones you'll want to stay with anyway.

Lock-In Assessment Framework​

Data Lock-In​

  • None: Export all data in standard formats anytime
  • Low: Export requires vendor request but data is structured and usable
  • Medium: Export available but formats require significant transformation
  • High: Export not available or only raw logs without structure
  • Severe: No export capability or data deleted on termination

Configuration Lock-In​

  • None: All prompts and configs exportable in portable formats
  • Low: Most configs exportable, some require adaptation
  • Medium: Templates available but significant work to replicate elsewhere
  • High: Configurations proprietary, cannot export
  • Severe: Vendor claims ownership of configurations you created

Knowledge Lock-In​

  • None: Complete documentation enables full replication
  • Low: Good documentation, some knowledge transfer needed
  • Medium: Limited documentation, significant reverse engineering required
  • High: Poor documentation, migration requires vendor expertise
  • Severe: No documentation, black box that cannot be replicated

Process Lock-In​

  • None: Standard workflows easily portable to alternatives
  • Low: Minor process adjustments needed for migration
  • Medium: Significant process changes required for alternatives
  • High: Workflows deeply optimized for vendor limitations
  • Severe: Entire business processes rebuilt around vendor-specific capabilities

Contract Lock-In​

  • None: Terminate anytime with reasonable notice, no penalties
  • Low: 3-6 month notice, minimal penalties
  • Medium: 6-12 month notice, moderate penalties (< 25% remaining)
  • High: Long notice period, significant penalties (25-75% remaining)
  • Severe: Effectively impossible to exit economically

Key Takeaway​

Your ability to leave determines everything else.

If you can't leave:

  • You have no pricing leverage
  • Quality degradation is your problem, not theirs
  • Contract terms are whatever they say they are
  • You're hoping the vendor stays good, not ensuring it

If you can leave easily:

  • Vendor must compete for retention on value
  • You can demand quality and responsiveness
  • You maintain strategic flexibility
  • You're a customer, not a hostage

Before signing:

  • Export a complete dataset and verify it's usable
  • Export all configurations and prompts
  • Review contract termination terms
  • Talk to former customers about their exit experience
  • Plan your exit before you enter

The best vendor relationship is one you could easily leave but choose not to. The worst is one you can't leave even though you should.

Choose accordingly.

Next Steps​