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Buying telecom isn’t like buying pencils

For many enterprises, procurements are an exercise in “filling in the blanks.” It doesn’t really matter what the customer is buying-office supplies, soap, ergonomic chairs-a procurement is just a matter of taking the customer’s boilerplate documentation, specifying the price, type and quantity of the applicable goods or services and-voilá!-there’s the […]

It’s not how much you spend; it’s how much leverage you have and keep

Contrary to what the providers tell you, the correlation between commitment and great prices is a lot lower than the correlation between leverage and great prices. The provider sales teams get compensated in part on the basis of the commitments they secure. Commitments (unlike actual spend) are “bankable,” and a […]

Second tier doesn’t mean second rate

You wouldn’t give an entire large enterprise network to a carrier with $1-2 billion in annual sales, but you could certainly give such a carrier a lot of business.  The carriers in this category include tw telecom, PaeTec, XO, Level 3 and Global Crossing. They have issues-Global Crossing famously mistreated […]

Don’t get roped into a benchmarking clause without teeth

If you ask a provider for a rate review or benchmarking clause you’ll get one. But the provider versions are worthless-what we call “we’ll talk” clauses. These don’t give you a right to money; they give you the right to a conversation. Under a real rate review clause, both sides […]