Businesses become critically dependent on platforms for even a small fraction of their revenue (e.g., 20%). This 'monopsony power' creates a stronger lock-in than user network effects, as losing that customer base can bankrupt the business.

Direct AI disruption is a minimal concern for telecom companies. The more significant threat comes from hyperscalers like AWS and Azure, which already dominate Europe's B2B cloud market with an 85% share. The real risk is these giants leveraging their cloud infrastructure to enter the B2C telecom space via virtualized networks.

Even if AI makes it easier to build competing software, incumbent SaaS giants retain customers due to immense switching costs. The operational disruption, retraining, and integration challenges of migrating a large organization create a powerful moat against new entrants.

The cost of re-validating, QA-ing, and re-training internal apps built on a specific LLM far outweighs potential token savings. Once an application is "dialed in" on a model like Claude Opus, the business has little incentive to switch, creating a durable competitive advantage.

Previously, cloud services were built as global instances and partitioned for customers. Now, demands for data sovereignty from countries like Germany require a fundamental architectural shift. Systems must be designed to run entirely within a single country's borders, ending the era of globally-shared cloud infrastructure.

While network effects drive consolidation in tech, a powerful counter-force prevents monopolies. Large enterprise customers intentionally support multiple major players (e.g., AWS, GCP, Azure) to avoid vendor lock-in and maintain negotiating power, naturally creating a market with two to three leaders.

Despite its talent, Europe struggles to scale domestic tech companies, leaving it strategically vulnerable. It's forced to depend on US cloud providers it views with suspicion or Chinese alternatives it also distrusts, with no viable third option.

To retain European business, US cloud providers offer "sovereign" services, like air-gapped clouds, that appear to isolate EU data. However, critics label this "sovereign washing," arguing that since the parent companies are American, they remain subject to US laws like the Cloud Act, which can compel data access.

Excel's market dominance stems from Microsoft's strategy of bundling it into the non-negotiable Microsoft Office suite. This made it impossible for enterprise customers to purchase software à la carte, effectively locking out competitors and making individual user preference irrelevant.