I was asked to describe how Arista has been able to penetrate the networking switch market relatively quickly. Arista was founded in 2004 and ten years later has achieved a competitive position against all the major vendors in networking and specifically against Cisco who has a dominant market position.
Most vendors develop product like an overly anxious parents making a baby. There is a lot preparation and planning and once the baby is “born” the product requires ongoing attention to reach maximum potential. For example, the Cisco Nexus 7000 family is 7 years old and has continually, if unpredictably, evolved to reach maturity & functionality of today.
By comparison, Arista has organised itself as a product factory. Each product is the result of a unified production line and the next product or feature is just a year or two away. Each product builds on the previous product. Arista’s value is derived not from individual products but it’s ability to continue to deliver new products rapidly and relatively higher quality than their competitors.
This idea isn’t new but I’m applying it to vendor product. David Meyer of OpenDaylight/Brocade has talked about the value of the open source ecosystem is not the product but software factory that produces the software. If I understand David correctly, the key point is that OpenDaylight can produce almost any software that is needed to develop a controller that delivers on the SDN potential. Today, most people believe in OpenFlow/OVSDB but the future might be something different – perhaps OpFlex, PCE, LISP or other.
Factories are More Valuable Than Babies
I keep hearing from vendors that customers want investment protection and long life. This only holds true when products are high value and high cost since the upgrade cost is less than the replacement cost.
As networking hardware falls in price in the years ahead (due to commoditization) then “product babies” are less relevant than “fast products”.
If a product is priced low enough then it can be replaced instead of upgraded. Just like x86 servers.
At this time, Arista is making easy profits due to high profit margins in network hardware. As prices drop, factories are more important than babies.