Farmers face vendor lock-in as agriculture goes digital

Data is becoming integral to the operations of farms everywhere, despite the persistent belief among some in Silicon Valley that farming is not a high-tech industry. Adoption of precision agriculture technologies has been on the rise for years, as farmers realize how valuable comprehensive field data has become. It holds the ability to improve yields, lower input costs, and pave the way for cutting-edge R&D like yield guarantees from seed and chemical companies.

In fact, farmers are so aware of the value of the data that they’re beginning to change their operations to better support their data strategies. Farmers across the country are starting to ask tough questions about data from their many providers. Who owns it? How will it be used? How do I extract maximum value from it? How do I put a “fence” around my data so that it’s protected for future generations?

As farmers begin orienting their seed, chemical, and equipment purchase decisions around their data strategies, they must take precautions to protect against vendor lock-in.

Vendor lock-in is a problem for farmers

Farmers are doing amazing things with new precision technology — like setting new yield records in difficult climates, using more precise applications of chemicals to decrease environmental impact, and even creating new revenue streams.

Because it’s still early days in the realm of digital ag, there’s a big risk that sellers are going to try to get farmers locked into their data systems and policies.

Farmers are all too familiar with some of the early warning signs. Some equipment manufacturers and precision ag software companies want perpetual licenses, upgrades, and services fees. Many vendors are even providing their biggest accounts with “free” hardware and software licenses to influence the adoption of their tech by other farmers (who have to pay full freight, sometimes up to $30K per cab).

Each large vendor is incentivized to create closed systems that don’t communicate with other systems. In fact, we’re noticing that vendors are developing data portability and interoperability standards that incentivize farmers to get all of their equipment from one manufacturer. But most farmers don’t want to do that — they want to be able to choose the best equipment for the job at hand, independent of what brand their other equipment is.

Farmers need to know the risks of vendor lock-in, and protect against it. Data doesn’t need to be as complicated at these vendors are making it out to be.

An old problem in a new industry

Although new to agriculture, vendor lock-in is not a new concept. The term has been used traditionally in IT and software to refer to the ways in which customers can get locked into a specific vendor for a variety of reasons. This typically happens in one of three ways.

1. Vendors can make it very difficult — and expensive — to switch to another system. When cloud computing came online, there was a big concern that adopting IT services from companies like Oracle or Cisco would lead to exactly this. In turn, droves of enterprises turned to OpenStack, an open source offering for their cloud infrastructure. OpenStack was clunkier and harder to configure in the beginning, but it could be custom-built and it guaranteed that enterprises wouldn’t be forced to stick with a single cloud vendor forever.
2. Another way vendor lock-in can occur is through a lack of interoperability — meaning that it’s impossible for a system to talk to other or newer systems. Think about when consumers switched from VHS to DVD — they had to replace their tape with a DVD version, accept that they didn’t have access to that content anymore, or keep both VHS and DVD players in their homes. No matter which way you slice it, it was expensive and inconvenient.
3. Perhaps the most sneaky way vendor lock-in can occur is through opaque contractual language that can legally lock-in customers to perpetual license renewal. While larger companies may have someone in charge of managing the contract and licenses with their vendors, small farmers do not have the luxury of hiring a legal expert to parse through the complicated language.

The vendor lock-in problem can be even more challenging in farming than in other industries, since so many of the software tools are built right into the equipment, which is a massive capital expenditure for farmers. The hard-pairing of hardware and software has been problematic in many ways, partially because farmers are often skeptical of how their data is going to be used on the other side — not an unfounded fear. It’s getting bad enough that some farmers are attempting to “hack” their tractors to avoid vendor lock-in for repairs and maintenance.

Protecting your digital harvest

To protect your data from vendor lock-in, the first step is to read the fine print for equipment prior to purchasing.

Demand clear answers on the interoperability, ownership, and portability of your data. Bring a list of questions to your dealership or precision ag vendor and ask things like:

• Do I own the data I generate using the equipment?
• What do you legally have the right to do with it?
• Can I get the data out of the cab and into the hands of my agronomist and other trusted partners?
• What happens to my data after I stop working with your company?

If you don’t like the answers you’re getting (or not getting), demand commitment to open standards and transparency — work with companies who have promised to keep their data agreements simple and clear. Start with the Ag Data Transparency Evaluator and make sure you read the terms of service carefully. Only work with companies that have actually passed the evaluator’s muster. Even some companies that helped draft the language of the Ag Data Transparency Evaluator have not signed the pledge to abide by the principles they are credited with creating.

Make the industry better for farmers

The more that farmers demand transparency and ownership over their data, the more the market is going to respond. We need to show companies that we’re deciding who we’re buying our equipment from based on data capabilities and policies, and that changes need to be made. This is the best way to ensure a future where farmers have rights to, ownership of, and access to their data, including the ability to profit from it.

Jason Tatge is the CEO and cofounder of Farmobile, a farm data company that provides farmers with real time access and ownership to their farming information. His previous company, Farms Technology, created an electronic marketplace to automate grain transaction and risk management processes, offering automated hedging algorithms accessible via smartphones and tablets; it was purchased by DuPont/Pioneer in December 2012.