According to a Crehan Research report, the continuing decline of costs for high speed Data Center Switches will lead to an increased adoption of these switches by the market. The researcher estimates that the Ethernet data center switch market will be worth $14 billion in 2018. The growth is expected to be driven by the continuing adoption of 10 Gigabit Ethernet for data center server access, and 40 and 100 Gigabit Ethernet for data center uplink, aggregation, and core deployments. Crehan Research believes that 10 Gigabit Ethernet will soon become the biggest contributor to the Ethernet Switch shipments.
Arista Networks’s Offerings
Founded in 2005, Arista Networks is a leading provider of cloud networking solutions. The company was created when entrepreneurs David Cheriton and Andy Bechtolsheim got together with Ken Duda to build a product that would deliver cloud networking solutions for large data center and high-performance computing environments. Their cloud networking equipment would help companies manage data traffic between Internet users and data centers of big customers. Their portfolio includes 1/10/40 and 100 GbE products that help make them the manufacturers of one of the fastest switching equipment in the world.
Their core networking platform product the Extensible Operating System (EOS) has been developed as a highly programmable and modular solution. The platform’s programmability has helped them create a suite of software applications that are able to meet the various needs of cloud networking ranging from workflow automation to network visibility and analytics. EOS also supports the capability to integrate third-party applications for virtualization, management, automation, orchestration, and network services.
EOS supports most leading cloud and virtualization solutions including VMware NSX, Microsoft System Center, and OpenStack. EOS uses Linux as its underlying operating system that also helps with integrating it with off-the-shelf Linux applications and other open source management tools.
Arista Networks’s Financials
Their client list includes Internet giants like Facebook, Microsoft, and Yahoo; financial companies such as Barclays, Citigroup, and Morgan Stanley; and media and service providers including Comcast, Equinix, ESPN, and Rackspace.
Revenues have improved 71% annually over the period 2010 to 2013, growing from $71.7 million to $361.2 million. Over the same period, net income has improved from $2.4 million to $42.5 million.
For the recently ended quarter, Arista Networks report a growth of 65% in revenues to $137.9 million with an EPS of $0.35. The market was looking for revenues of $125.3 million with an EPS of $0.13.
Arista has not relied on venture funding and instead was created using their founder’s funds. In June this year, Arista went public and raised $226 million by selling 5.3 million shares at $43 each on the NYSE. Since listing, the stock touched a high of $94.84 in September this year. Their stock is trading at $77.51 with a market capitalization of $5 billion.