Explain vendor exploitation

Once the client firm has divested itself of specific assets it becomes dependent on the vendor. The vendor may exploit this dependency by raising service rates to an exorbitant level. As the client's IT needs develop over time beyond the original contract terms, it runs the risk that new or incremental services will be negotiated at a premium. This dependency may threaten the client's long term flexibility, agility and competitiveness and result in even greater vendor dependency.