Strength in numbers

Capital equipment makers have enough on their plate in the volatile IC market without worrying about financial reporting glitches, freight service problems, or fried computer networks. What if they could hand off noncore activities and reduce their costs in the process?

CapOneSource (www.caponesource.com) calls itself a purchasing alliance that intends to "extend the benefits of outsourcing to a broad range of other capital equipment companies in order to reduce the outsourcing/out-tasking (sic) costs and leverage common, standardized business processes within the solution providers' capabilities." Corporate-speak aside, what the outfit does for its members is negotiate volume discounts with key providers in operations, finance and accounting, general services, and information systems.

Founded in July 2003 by Lam, Varian, Mattson, and Credence, the group has ballooned to 26 firms, mostly from the toolmaking side. CapOneSource's goal is to grow to 200 members and achieve the aggregate buying power of a corporation with more than $20 billion in revenues. New members must make slightly less, with buy-in at the $100 million sales level, and must purchase services from one or more "solution providers."

Published reports mention savings to CapOneSource members in the 30%-plus neighborhood, which is likely to make equipment execs smile all the way to the bank.