US refurbisher to challenge Australian resellers with ‘capex delay’ approach
- 18 August, 2014 14:14
Curvature CEO, Mike Sheldon.
Curvature is preparing to launch a regional office in Australia in early 2015, and is relying on its ‘capex delay’ model to win business from both vendors and traditional resellers.
Formerly Network Hardware Resale, Curvature is a supplier and repairer of used datacentre and networking hardware which it refurbishes and upgrades, and bundles with maintenance and professional services. With two categories under its belt, it is now exploring the addition of servers to its portfolio, with storage in the pipeline.
Curvature has been shipping into Australia since 2002, but has never held a physical presence in-country.
The company's go-to-market is underscored by the rejection of vendors’ three-year hardware refresh cycles which it claims corners customers, and subsequently resellers, into high-cost capital expenditures at narrow intervals.
It is not a unique approach; resellers like Sydney-based Network Brokers do the same, overlapping with Curvature on Cisco equipment, while also supplying the likes of Juniper Networks, Nortel, and HP.
“What it comes down to is a capital expenditure (capex) delay,” Curvature Asia-Pacific and Japan (APJ) sales vice-president, Jason Ogden, said. “By adopting this approach, you extend life of a product from a manufacturer’s three-year lifetime to seven or longer.”
Company president and chief executive officer, Mike Sheldon, said the channel struggles in providing options to customers that cannot afford the shortened end of life and support offered by vendors.
“What cost $30,000 two years ago is now $8000, but a replacement costs $20,000. OEM partners only sell the $20,000 model, but our buyers can get in at that lower price point.
“If you’re a Cisco or HP partner competing against big guns, your message has to be that you cannot compete on price because it’s not possible. That means you wrap support and services around the solution to differentiate.”
While Curvature intends to be seen as an original equipment manufacturer (OEM) partner, he told ARN that refurbishment means customers have the option to obtain big-brand hardware at a lower price point.
“Keep what you have that works, and buy what you need even if it is a generation old,” he said.
“Our maintenance comes in at about a third of the cost of replacing every three years, we can sell and support multiple big vendors on one contract, and we believe we can compete on price and provide better maintenance.
Curvature was founded in 1986 as a secondary market reseller of IBM mainframes, before shifting its focus to Cisco and networking equipment in the 1990s. By 2001, Curvature turned into a $21 million secondary reseller with no vendor partnerships.
In 2008, it launched its maintenance and professional services group which has become its fastest growing, ultimately shaping the business it is today; a supplier to the end user channel, whether it be to customers or resellers, with global revenue of $300m.
Curvature has offices in the USA, Europe, and Asia-Pacific (APAC). The upcoming Australian office will more than likely be located in Sydney due to the logistical convenience.
Its APAC operations account for 20 per cent of its global business, while 25 per cent of that is comprised of Australian earnings.