Curvature Plans to Break the Hardware Replacement Cycle
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