Verizon CIO Taking It To Vendors

from the save-more,-save-more dept

Chris writes "This is scary if your business is based on selling to large corporations. Verizon is really squeezing its vendors. I'm sure the others are doing the same thing - or will soon." The WSJ article is a profile of Verizon's CIO and his intense focus on squeezing their technology vendors as much as possible. It talks about how he relies on eBay as a "stock market for servers" and tells his staff to make sure they get lower prices than what's available on eBay. Basically, he's driving down prices by relying on open information. The more information you have as a buyer, the better position you're in - and Verizon seems to be doing that to an extreme point. The one thing that I wonder about, though, when a company is so focused on "cutting costs" is that they begin to forget about the other side of the equation: the benefits that those costs were supposed to bring. You can cut all your costs if you shut down the company, but the reason you're in business is because you think you can take the assets you have and create a bigger return. So, when a company is entirely focused on cutting costs, they often end up cutting too deep, and losing out on the ability to make a bigger return for their shareholders.