Light Reading

Curvature Plans to Break the Hardware Replacement Cycle

Carol Wilson

The news today that Network Hardware Resale has rebranded itself as Curvature might not have grabbed a lot of big headlines in the telecom space. But that is probably because most folks think of resold hardware as the stuff of dusty warehouses, online bargains, and even Craigslist specials. (See Network Hardware Resale Becomes Curvature.)

Nothing could be farther from the reality of the new Curvature , which is actually carving out a substantial business by enabling companies not only to buy pre-owned hardware, but also to keep their hardware in service for as long as they deem it functional and purpose-serving. That can be years after the original equipment manufacturer has stopped supporting the gear or developing software for it.

Jeff Zanardi, vice president of business development and global marketing for Curvature, says the idea is to break the hardware replacement cycle of 3-5 years typically dictated by the OEMs.

The 28-year-old firm pulled in $260 million in sales in 2013, or the equivalent of about $1 billion in sales if the same gear were sold through a traditional value-added reseller, he says. And though much of that is Cisco Systems Inc. (Nasdaq: CSCO) gear sold to enterprises, Curvature also sells a variety of network products from a variety of vendors, including Juniper Networks Inc. (NYSE: JNPR), A10 Networks Inc. , and Brocade Communications Systems Inc. (Nasdaq: BRCD).

And by developing its own support mechanisms that help network operators prolong the life of gear that is working well (particularly customer premises equipment), Curvature says it is changing the IT infrastructure economics.

"The biggest and fastest-growing part of our business is around support and maintenance, providing third-party maintenance on the networking side, for Cisco products and others," Zanardi says. Curvature also has a full line of professional and managed services, including hosted services. It plans to launch infrastructure-as-a-service offerings shortly.

One major reason for the name change is to make it clear that the company's strategy isn't to resell network hardware but to enable its customers (both enterprises and service providers) to take control of the product lifecycle for what they buy and not be pushed into upgrading equipment because the OEM is declaring it obsolete and discontinuing software upgrades and support. "We are challenging them to take back control of their infrastructure and delay capex expenditure to when they want to do it, not when OEM tells them they have to," Zanardi says.

Curvature makes that process easier with its NetSure services, which provide the maintenance on support for products even before they enter the end-of-lifecycle process, for less money than the support provided by the OEMs.

The company actually recommends a hybrid strategy. "There are absolutely devices that need to stay on a Cisco support contract, for example, because there are software upgrades as part of that contract." But once the end of the software upgrade cycle occurs, there is little reason to stay on a maintenance contract with the OEM, since that is usually more expensive.

To prove its cast, Curvature commissioned Forrester Research Inc. to conduct a study, which showed that a customer with 10,000 employees and $3 billion in annual revenue would save 65% on hardware and maintenance, or $1.3 million over three years, while reducing unplanned downtime by 80%, saving $788 million over the same period.

Global service providers are among Curvature's customers and are increasingly attracted to the model, Zanardi says, because it enables them to avoid the costly process of replacing CPE that may be scattered all over the globe and not easily repaired or replaced.

— Carol Wilson, Editor-at-Large, Light Reading

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Ryan Welch
Ryan Welch,
User Rank: Lightning
7/16/2014 | 1:36:33 PM
Re: N(ot)FV
I could see a continuing business in a COTS server support. Is there a similar market for software support? NFV promotes the ease of updating network software, but from all I've heard, it's more about minor updates. A "forklift upgrade" would probably still require some hands-on work.

An example that comes to mind is Windows XP. While it's not strictly telco software, there was still a fiasco when Microsoft announced that they would no longer continue supporting it. As more network software comes out, could Curvature (or somebody else) move to provide extended coverage for applications? I think yes, espcially if open-source software is where we are headed.
User Rank: Light Sabre
7/16/2014 | 10:41:16 AM
Re: N(ot)FV
It seems Curvature's plan to offer service and maintenance would be fitting as an addition to it's revenue source. I wonder if the hardware replacement business is slowing down and bit, so it would make sense to offer the maintenance end to keep the stuff running? 
Carol Wilson
Carol Wilson,
User Rank: Blogger
7/16/2014 | 7:03:12 AM
Re: N(ot)FV
In the short term, this seems like a good fit for companies preparing to virtualize their CPE - they can extend the life of what's out there and working. 

In the long run it does seem like the hardware becomes less of an issue, if companies move to commercial off-the-shelf stuff, but even then they would be attracted to maintenance contracts and the like.

And, as you said, NFV is very much a work in progress right now. 
Ryan Welch
Ryan Welch,
User Rank: Lightning
7/15/2014 | 5:12:37 PM
Since one driving force behind the NFV push is capex/opex reduction, it's interesting to hear about somebody who is taking a completely different apporach to that challenge.


I wonder what kind of impact Curvature will have on the advancement of NFV. It would seem that company that serves to prolong the life of network hardware would be almost completely put out of business by virtualization. But since NFV is a lot of talk and little action on the part of the network operators (from my point of view at least), Curvature still have plenty of space to work.

I don't know enough to make a call one way or the other, but I'd love to hear other thoughts on the matter.
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