← Back to Academy

Switching Costs: Why Enterprise Software Is So Hard to Displace

Business Analysis • Beginner Investing • 7 min

Switching costs are what make it painful, risky, or expensive for a customer to leave a product once they've adopted it — and enterprise software is one of the clearest real-world examples of this moat type at work. Switching costs generally break down into three categories: financial (direct costs like cancellation fees or the price of implementing a replacement system), procedural (the time and effort required to…

2 of 2 free lessons used

Create a free account to keep reading

You have read your 2 free lessons. Making an account is free and gives you 2 more straight away — plus your progress, streak and quiz scores saved as you go.

Learning through your school? Join your class — school students get everything, at no personal cost.