I don’t think it’s that hard to understand greater competition in this sector will lead to lower margins. Other firms aren’t just gonna give up and let ANET win.
got no dog in the hunt (though I want to investigate!), but what they actually said was:
Aaron Christopher Rakers Wells Fargo Securities, LLC, Research Division - MD of IT Hardware & Networking Equipment and Senior Analyst Yes, I just want to go on the gross margin line and understand. I think, this quarter, looking at the guidance of 62% to 64%, that would compare to 63% to 65% guidance ranges over the next – or the last couple of quarters. It looks like your product gross margin came down a little bit. So just curious of kind of what’s changing there, if there’s anything within the mix or assumptions there that resulted a little bit of a lower gross margin assumption?
------------------------------------------------------------------------------------- Ita M. Brennan Arista Networks, Inc. - CFO & Senior VP Yes, I mean, I think the biggest driver still for our gross margin is kind of within that 63% to 65% range is going to be customer mix, right? And as we head into Q2, we believe we will have a heavier cloud, the large customer base mix in Q2, and that’s causing us to be a little more cautious around the gross margin guide and the gross margin outlook. So it’s really a customer mix question. I think the 63% to 65% for the year, we still feel good about.
so a mix issue, not indicated as competition
my knowledge to judge this answer is ZERO