Arista Networks

Arista Networks is a producer of the network equipment for the large data-processing centers (DPC), high-performance computing systems and cloud-based network decisions.

The company offers a wide range of switches of various form factors (switches with a bandwidth from gigabit to 100 gigabits, with different port densities, switches with low latency, deep buffers, various specific functionality). At the same time, a feature of Arista is a single modular operating system Arista EOS for all devices, built on the basis of the standard Linux kernel and having all its functionality. This enables you to tailor your network devices to your needs, allowing you to easily integrate Arista switches into your existing IT infrastructure.

Activity indicators

2020: 3.9% revenue decline to $2.32 billion

Arista Networks registered a 3.9% decrease in revenue in 2020 compared to 2019, despite the fact that data center owners were actively invested in infrastructure development in the context of the COVID-19 coronavirus pandemic, which led to a surge in demand for cloud and other Internet solutions.

The company finished 2020 with sales of $2.32 billion against $2.41 billion a year earlier. The most part of a turn ($1.83 billion and $2.02 billion in 2020 and 2019 according to) fell on supplies of equipment (generally routers and routers) and licenses for the software, and annual service revenues (mainly it consists of services of support of the sold products) rose from $389.6 million to $486.7 million.

As explained in the company, sales of its products in 2020 decreased due to restrictions imposed around the world amid the pandemic, as well as a decrease in orders from large customers.

Arista Networks revenue fell 3.9% in 2020

The main market for Arista Networks remains the countries of the Americas (mainly the USA), which in 2020 added $1.77 billion to the revenue of the network equipment manufacturer (corresponding to 76.5% in total turnover). In 2019, revenues in this region were measured at $1.83 billion, or 76.1% of the total.

In EMEA, sales from Arista Networks in 2020 decreased to $326.73 million from $381.7 million in 2019. The share of Europe, the Middle East and Africa in total revenue for the year decreased from 15.8% to 14.1%. In the Asia-Pacific region, sales of the company increased from $195.9 million to $218.8 million, and their share in annual revenue - from 8.1% to 9.4%.

In addition to revenue, Arista Networks also fell net profit - from $859.9 million in 2019 to $634.6 million a year later.

By December 31, 2020, the volume of assets of Arista Networks amounted to $4.74 billion against $4.19 billion a year earlier.^[1]

History

2019: Overview of the company's product strategy

Commercially available chips (merchant silicon)

• Competition in the chip market has made most chips extremely close in characteristics
• At this time, the company selects chips from different manufacturers to solve specific problems

Open Operating System

• A single OS for a wide variety of equipment models
• Linux kernel - proven years and stable
• Familiar interface - engineers already know how to use Arista

Ecosystem & Partners

• Integrate with more third-party solutions
• Assemble the solution you need

Arista Universal Network

• Universal network for any application
• Working only on open protocols and standards (no vendor lock in)
• Virtualization support from VMware, Microsoft, KVM, and Nutanix
• Integration with different software and hardware vendors
• Easily adapt to changing business requirements

Arista Application Areas

2016: Prohibition of sales of Arista equipment in the USA

In August 2016, the American manufacturer of network devices Cisco announced that it managed to achieve a ban on the import of equipment of rival Arista Networks into the American market, reports Reuters.

The United States Trade Representative Office (U.S. Trade Representative Office) supported the decision of the US International Trade Commission (ITC) in June 2016 that Arista violated Cisco's intellectual property rights, so it must stop importing, as well as selling, delivered switches of the 7000 series and some other devices in the United States. We are talking about products that bring Arista most of the revenue.

Cisco has banned sales of Arista equipment in the United States

The ITC saw violations by Arista of three Cisco patents that relate to management and security technologies of communication networks. Cisco filed a complaint in December 2014.

Arista was founded by former Cisco top managers who had access to patented ex-employer technologies, so the founders of Arista could theoretically take advantage of Cisco's developments.

On August 22, 2016, Cisco General Counsel Mark Chandler wrote on the company's blog that the ban on the import and sale of Arista equipment should take effect on August 23.

According to Marc Taxay, who is in charge of legal issues at Arista, the company has redesigned the software in its switches and hopes that the equipment is now in "full compliance" with ITC requirements.

We are still focused on continuing to supply products that do not violate patents to our customers, "Taksey said, adding that Arista intends to appeal.

Mark Chandler said that by August 23, 2016, Arista was still using Cisco branded technology and was not receiving ITC approval for updated products.^[2]

2014: Cisco accuses Arista of stealing technology

In early December 2014, Cisco Systems sued its rival Arista Networks, accusing it of violating intellectual property rights. The theft of ideas could involve former top Cisco managers who established Arista in 2004.^[3]

Cisco filed two lawsuits against Arista in California federal court at once. In one complaint, the plaintiff reported a violation of 14 patents used to create 12 functions of the Arista EOS operating system. The second lawsuit is about copying Cisco user guides and command line structure.

"This is not an accident, but a strategy," Cisco said in a statement. - The company purposefully and brazenly committed a flagrant violation of intellectual property rights in an attempt to gain competitive advantage in the market. Arista decided to get a market share easily. "

The founders of Arista are former top Cisco managers, including Arista Development Director Andreas Bechtolsheim, Technical Director Kenneth Duda, and Chief Executive Officer Jayshree Ullal. The latter commented on the claims as follows:

"I am very disappointed with the tactics chosen by Cisco. This is not the Cisco I knew before. "

Cisco said that the former top managers who founded Arista were well acquainted with the patented network technologies featured in the new lawsuits. Now these developments are fully implemented in Arista products, which caused "significant and irreparable harm to Cisco," wrote Mark Chandler, senior vice president and chief lawyer of Cisco.

Cisco and Arista are companies of various sizes (their revenues in the third quarter of 2014 amounted to $12.2 billion and $155.5 million, respectively). However, the business of a smaller network equipment manufacturer negatively affected Cisco affairs for several years before the US corporation introduced new Nexus products in October 2013, which in their capabilities are close to economical and simpler Arista solutions, Bloomberg notes.^[4]

In November 2014, Cisco CEO John Chambers announced that orders for new Nexus 9000 and old Nexus 3000 switches were 50% higher than Arista's total revenue. According to the top manager, his company has achieved more in a year than Arista in its entire history.

Notes