Arista has 6.6% of the ethernet switch market (by rev) up from 5.6% in last 1 y. It is next only to Cisco and Huawei.
2/3rd of Arista’s rev came from 100 gig.
Based on Arista’s investor presentation at their website one can calculate Arista has 30% of the 100 gig data center ethernet switches market (this # was mentioned in one of the calls by an analyst). 100 gig market is expected to grow 30% in 2019 and then stay flat as 400 gig takes over. By 2022 100+400 gig data center ethernet switches market is estimated to grow 3.3x. If Arista can maintain its market share in that segment its rev will grow by 2.7x over the next 4 years even assuming the rest of Arista’s business grows at 10%.
That is 28% compounded growth over 4 years. Given the cash flow printing ability of Arista that is pretty good. If Arista can succeed in the campus market there may be some real upside surprises to play with the share price.
Not sure if I want to go there or not but Arista is an incredibly run company that is systematically taking marketshare. Nevertheless, Arista is not the only incredibly run company in the industry and yet growth has run out.
But as of now there is visible road map of growth for multiple years to come. Worth a further look.
In the hotly contested 25Gb/50Gb/100Gb segment, Cisco is the market leader with 39.4% revenue, which is up from the 34.6% share it held in this segment in the previous quarter.
It is one quarter, perhaps a fluke, but if not this is something to be worried about. Up until now Cisco has done nothing but lose marketshare. ANET was the market leader in 100 gb/sec. Perhaps still is as Cisco may be making it up in 25 and 50gb. But Cisco appears to no longer be the inept competition that they once were and are now adjusting to a world with Arista in it.
To me this is concerning. You can run all the numbers you want but the market will only give a premium to a company if it continues to take marketshare and disrupt. Cisco gained more marketshare by far last quarter than ANET. Something to watch.