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Compliance keeps big software in place
Microsoft as the rail
Customers buy Microsoft as the rail that everything else runs on. Active Directory holds employee identities, Excel is where the numbers in board decks come from, and Teams is where compliance-recorded conversations happen. Azure holds a FedRAMP High authorization and Department of Defense Impact Level 5 clearance, so a defense contractor cannot casually swap it for something cheaper.
Salesforce in government
Salesforce shows the same pattern in government: 15 out of 15 cabinet agencies run on it. A CRM, an ERP, or an HR system is not something to replace with a vibe coded substitute when compliance is involved, because those systems need certainty.
How software stocks split
Software stocks show the split too. In July they rose while many semiconductor AI stocks fell, and Snowflake is up close to 90% over six months. Meanwhile, many no-code and application software companies are deciding to sell the company and take what they can get.
Why is switching enterprise software so costly?
Switching means moving years of data, rebuilding connections to other systems, retraining staff, and running two systems during the changeover. Economists Carl Shapiro and Hal Varian analyzed this kind of lock-in in their 1998 book Information Rules. Each added integration raises the price of leaving, since every connected system must be reworked.
How do FedRAMP levels limit vendor choice?
The US government created FedRAMP in 2011 to standardize security reviews of cloud services. It has Low, Moderate, and High impact levels, and High covers the most sensitive unclassified data, such as law enforcement, emergency services, and health records. A cloud service must be assessed and authorized at the matching level before federal agencies can use it for that data. The assessments cover hundreds of security controls.
Why do regulated firms record workplace conversations?
Regulated firms must keep records of business communications so regulators can review them later. In the US, SEC Rule 17a-4 sets how broker-dealers must preserve such records. Requirements include storing records in a form that cannot be altered, a standard often described as write once, read many. Recording and archiving tools therefore tie into the chat or meeting platform itself, which makes the platform hard to swap out.
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