Arista posted an update to the legal battle with Cisco on their website. Sounds like it is getting close to being over with Arista prevailing.
https://s21.q4cdn.com/861911615/files/doc_downloads/legal_pr…
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Part of the recent downturn in price is due to the fact that Cisco is said to be cutting prices to go after the competition. Perhaps Cisco’s move to become more of a high margin software company is allowing them to cut hardware prices to the point where they are much more competitive. This could be a long term battle that hurts ANET.
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That is not what was being said. The Cleveland analyst said that Cisco was being “aggressive” with pricing. Well, we know Cisco has been aggressive with prices, been trying to bundle products to give better value, for years. Arista is their primary mortal enemy. It is personal to them. the litigation documents and the testimony of Cisco executives make no mistake about this.
What the analyst did not say is that Cisco is becoming MORE aggressive in its pricing.
The analyst report (given to us for free, from a source that never has given away free reports on Arista and sells their services to institutional investors) put out a release that is very similar (but with a lot less sophistication) from our favorite short analyst. That analyst admitted, as an example, that SHOP has the best platform, but did hit on a few legitimate issues (but perhaps in a manner that was hyperbole - but the underlying points deserved investigation, and there was some truth to it - whether or not material is another discussion).
In this report, the Cleveland analyst did not even do that much. The Cleveland analyst told us NOTHING new. Cisco is being “aggressive”. Yeah, so! Microsoft is looking at white boxes. Yeah, so! That is old news. Is Cisco somehow being more aggressive. Is Microsoft somehow looking at more white boxes to displace Arista?
It is an utterly bogus report, and given for free…take it for what it is worth.
It was good to take another more thorough look at Arista. One which I certainly took on NPI. Starting out with SONIC and moving from there. It was a good exercise.
Tinker
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