Although most of this stuff is way way over my head I think this is an important announcement.
Those with a Stock Advisor subscription can follow the discussion we’ve been having on the SA ANET board.
But, Frank’s right that this is potentially an important announcement.
From MarketWatch: <>Arista Networks stock gains after analysts weigh in on campus-switching plans https://www.marketwatch.com/story/arista-networks-stock-gain…
Morgan Stanley analyst James Faucette reiterated his overweight rating on the stock, writing the Arista’s “attraction as a stock is the push into new markets, including campus, that the company is just beginning, while we think the market is overly focused on hyperscale customer dynamics (where we still see good demand growth).” Faucette sees Arista’s move into campus networking as one that could potentially double the company’s total addressable market.
And from https://www.sdxcentral.com/articles/news/arista-networks-ent… :
Jefferies analyst George Notter said “We understand that Arista already has a number of customers deploying their traditional data center switch products in campus applications,” writes Notter. “Moreover, they’ve been getting requests from existing data center customers for campus products. These requests really accelerated over the past three quarters. Moreover, they could enter the market without significant additional R&D commitments.”
OK, that’s two moreovers, but so far this seems a smart move on Arista’s part, tapping into a potentially large market (one estimate in Barron’s a couple years ago was $14Billion) with products that didn’t require a huge R&D investment/effort.
Cisco released new software-based products for the Campus Switching market last year (Catalyst 9000), which have done well for Cisco. It’s worth noting that they have a recurring subscription licensing model, indicating that Cisco sees where the future is.
So, while getting into a new market is potentially exciting for Arista, it does seem that they’re going toe to toe with a good new product line from Cisco in that market. I like Arista a lot, and it’ll be interesting to see how this plays out.