ANET CTO Podcast Must watch

Rizz posted this on the NPI board and thought I would repost here.
Certainly worth the time to watch.

http://bit.ly/2BuaFgS

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A repost of my NPI post for your consideration.

I think this podcast demonstrates why ANET will crush Cisco.

I spent 45 years in networking, starting with 110 baud modems. I also worked for Cisco in a senior technical role in San Jose. In my view, and this view was reinforced by many conversations with Cisco’s top leadership, that the Cisco philosophy was first to market regardless of quality. I was also the Executive Director of an enterprise with an annual telcom/networking budget of $100,000,000 per year. I was the final decision maker for all major switching, routing, and net security purchases. I was also ultimately accountable for the reliability of our vast network to all business units.

I can say that my biggest issue with Cisco is that I felt that they were always debugging their equipment, software and support processes on my time and at the expense of my credibility with business units.

A culture such as the one espoused by the CTO on this podcast would have greatly influenced my buying decision, even at a premium price.

I know I would have had a war with the low level tech’s trained in a Cisco Academy. That tool worked very well for them. I think it was on the NPI board that either Denny or Tinker talked about Lennin’s “Useful Idiots”. A low level work force that will only consider one product is a prime example.

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Thanks for the link hydemarsh!

This speech is really amazing; the passion of Ken is almost tangible. I think it is a great illustration of the quality of the management team and the business in general. It gives me a lot of confidence that they will do very well for many years to come.

I especially liked the beginning when he talked about having no deadlines and always taking quality first - reminded me a lot about the philosophy of one of my favorite companies as a customer and as a shareholder: Activision Blizzard (ATVI). They always used to say: “It’s done when it’s done”, which was sometimes hard as a customer, because you had to wait so long for the games to come out. But you always knew that the games would be of the highest quality and would be worth the wait. In the end customer satisfaction was extremely high, almost cult-like. Obviously the business and stock did very well against this background.

Unfortunately I can’t judge personally, if the same is true for ANET, as I’m not familiar with the product as a customer. But from what I read around here customer satisfaction is very high - makes a lot more sense to me now.

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Thanks for the link.

What is NPI?

Thanks Chris.

New Paradigm Investing. It’s another board frequented by many of the same posters as Saul’s board. In addition to investing discussions, there are a lot of political discussions.

http://discussion.fool.com/historical-arista-prediction-32989630…

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Thanks hydemarsh, that was really inspirational! (Especially the first part, that I could actually understand😀).
Saul

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Thanks, that was really interesting.

In university, I took an upper-level computer networking course, and the instructor told a story about AT&T and MCI.

AT&T, like Cisco, was a huge organization, with a lot of old systems for handling phone calls, billing, etc. It’s very very hard, very very expensive, and very very (very) risky to replace these systems. Those sorts of large projects fail more often than they succeed.

MCI came along and created software systems from scratch, and created friends-and-family (circles) calling, making long distance cheaper and taking a lot of business from AT&T. They were able to do this because their business wasn’t based on old, inflexible, unchangable software.

Arista Networks has that same advantage over Cisco - they can innovate with a much lower price tag than Cisco can, as new features won’t run afoul of legacy systems.

I understand what he was talking about - using Linux, running process in user space, rather than in the kernal, and using a system database rather than a message queue. It makes for more reliable software, which makes for a more reliable piece of hardware.

And I really like their focus on quality, and on not giving bonuses for shipping a crappy product on time.

David

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“It’s about: why am I doing this? Why did I start this company? Why do I come to work each day? I have, you know, I’ve done well enough at previous companies, I could have retired before founding Arista. So what makes it worth it? And what makes it worth it to me is the pride of my switches deployed in some of the world’s greatest networks, massive web companies, mainstream financial services, the big HPC centers. And I’m so proud that we make their networks better each day. And what I hate is messing up their network. Because that’s not why I’m here.

My assumption is, we do a great job for our customers, the stock price ultimately takes care of itself.”

-Ken Duda, Arista CTO

Gold.

Bear

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most of the early part about quality applies to any company.
I listened to it with Tesla in mind, because I understand cars better than network boxes. Clearly Tesla fell behind on part #3 , testing. But quality is a goal with them, hopefully they have learned something. If so, introduction of model Y,the real game changer , will go smoother.

I think preset ANET prices represent a buying opportunity.
The company only forecast two quarters ahead and these are the seasonally slow quarters . If my belief that Arista is a game changer is correct, we will be seeing big earnings pops in the last half of this year.

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another podcast
https://www.youtube.com/watch?v=jQWDVJjQ6kA

looking at it from Arista’s customers point of view

Russell Kelly, Technical Marketing Engineer, gives an overview of how Arista is positioned to attack the routing space, with a combination of silicon and programability. This is informed by a transformation in routing architecture based around cloud principles that have driven transformation in most other enterprise infrastructure already. He then gives an overview of the scalability of their approach with FlexRoute.
Present routing domain creaking at the seams.Bandwidth is expanding beyond all expectations. Present solutions do not scale. Tool set for customers to de-risk their network. Flexible , simple , programmable, scaleable. …

september 2017
“De risking” Like that. Add to it the quality mentioned in other podcast, let Arista take the problem of an off mark quarter rather than throwing a buggy product onto the customer . Something that I have heard competitors do regularly.

That may be but a rapid fall from 311 to 244 based off of the ceos call for 25% growth down from 50% is not for the faint of heart.

A 20% haircut in 3 days.

Do u not trust the ceo and what she says?

If she doesn’t know what she’s talking about who at arista does?

R market forces more powerful than she knows?

Is arista gonna get overwhelmed w orders that Jayshree is clueless about?

Does the lack of a bowed up sales team keep them blind as to the future?

Is she gonna b the super queen of 100 g and just doesn’t know it?

Or is she rejecting the crown?

Or maybe she knows that the lawsuit workarounds r hurting a lot. And juniper and Cisco r just getting their offerings up to really compete. And one or both r offering switches at a discount packaged w their other offerings. As arista expands they may b going down market to enterprise w less margins, paying hpe commissions that they don’t pay now.

Lots to contemplate, not oh she talked the analyst s down but we know arista will still grow 50% range.

Or maybe not.

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I sent this link to my step Dad asking his thoughts on this. I did this because this is kinda his work environment meaning he has worked in the tech biz in the San Fran bay area for the last 20+ yrs. blah blah blah.

Anyways he responded with this,

“He’s right on for software. It sounds like they started off right because he was one of the founders. Other place have tried but they have to fight management culture all the way. With mature companies it’s almost impossible to change the culture and processes”

So we’ll see how much Cisco can really change to compete but with a founder like this it’s definitely reassuring when we have our money parked there.

Chris.

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Arista has always been about great engineering and practices. That’s the thing I can appreciate the most from them.
It’s also a great business.

tj