Light Reading
The pricing values the company at nearly $3B, and it's likely based on strong financials, despite a weird legal dispute with a co-founder.

Arista up 32% on IPO

Mitch Wagner
6/6/2014
50%
50%

Switch vendor Arista shares traded up more than 32% early Friday afternoon following an IPO, placing the company value at $2.98 billion. That's likely based on the company's strong financials, and it's despite a weird legal dispute with a co-founder.

Shares in the Santa Clara, Calif., company traded at $56.80 at 1:05 p.m. EDT on the New York Stock Exchange Friday under the symbol ANET. Arista Networks Inc. launched Friday morning with an IPO price of $43 per share for 5.25 million shares, raising $225.8 million. That's well above the expected price range of $36 to $40.

Arista, which peddles Gigabit Ethernet switches and data center software, has 6% market share, putting it No. 2 behind Cisco Systems Inc. (Nasdaq: CSCO), according to MKM Partners. Arista's compound annual growth rate for revenue was 71% from 2010 to 2013, with 2010 revenues of $71.7 million growing to $193.4 million in 2002, and then up 87% to $361.2 million in 2013. Profits grew from $2.4 million in 2010 to $42.5 million.

Microsoft Corp. (Nasdaq: MSFT) is a major customer, accounting for 22% of revenue in 2013. Other customers include Facebook , Citigroup , Comcast Corp. (Nasdaq: CMCSA, CMCSK), Equinix Inc. (Nasdaq: EQIX), ESPN, and Rackspace Hosting (NYSE: RAX). MKM expects Google (Nasdaq: GOOG) to become a major customer as well. (See Summer: Cloudy With a Chance of Tech IPOs.)

The company formed in 2004 as Arastra with $100 million in funding from two founders, chief development officer and chairman Andy Bechtolsheim and chief scientist David Cheriton. Ken Duda, CTO and senior VP of software engineering, was the other founder. The company changed its name to Arista Networks in 2008. Its switches have become more popular in the past year or so, and the company claims to have more than 2,300 customers. (See Arista Announces Datacenter Switches.)

Arista competitors include Brocade, Cisco, Juniper,and Extreme Networks for business from data center operators, large enterprises, and telcos.

Co-founder Cheriton quit the Arista board March first and founded Optumsoft, which sent a letter to Arista in November claiming ownership of "certain components of our EOS network operating system incorporated in all of our products pursuant to the terms of a 2004 agreement between the companies," and cited "breaches of certain confidentiality and use restrictions in that agreement." (See Arista Faces Legal Challenge as It Files for $200M IPO .)

The successful IPO marks the first signs of a stabilization of technology IPOs following a rough April.

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to wagner@lightreading.com.


Want to learn more about SDN and the transport network? Check out the agenda for Light Reading's Big Telecom Event (BTE), which will take place on June 17 and 18 at the Sheraton Chicago Hotel and Towers. The event combines the educational power of interactive conference sessions devised and hosted by Heavy Reading's experienced industry analysts with multi-vendor interoperability and proof-of-concept networking and application showcases. For more on the event, the topics, and the stellar service provider speaker lineup, see Telecommunication Luminaries to Discuss the Hottest Industry Trends at Light Reading's Big Telecom Event in June.


(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
DOShea
50%
50%
DOShea,
User Rank: Blogger
6/9/2014 | 5:15:12 PM
Re: Cisco
I agree about the networking market being up for grabs. I think we have talked about Dell and Brocade quite a bit as the main companies positioning for a bigger piece of that action vs. Cisco and Juniper, but Arista deserves attention there, too.
FakeMitchWagner
50%
50%
FakeMitchWagner,
User Rank: Lightning
6/6/2014 | 4:17:48 PM
Cisco
Plexxi co-founder Mat Matthews sends the following email comment:

"The strong interest in the Arista IPO suggests that investors believe there is market share up for grabs in the networking industry."


Also: 

"Arista's IPO demonstrates the viability of hardware and the robustness of Ethernet switching in a space that has been saying for years that hardware is going away."

Interesting perspective. Is Cisco vulnerable?

AANT is trading at 54.80 at 4:09 pm EDT in after-hours trading. That's down from when I filed this article, which was down from when I started it -- AANT was up 35% then. 

 

Flash Poll
Wagner’s Ring
Data Centers Drive Telcos Into the Future

8|28|14   |   2:20   |   (2) comments


Data centers are at the heart of key trends driving telecom -- network virtualization, the drive for increased agility, and the need to compete with OTT providers.
LRTV Custom TV
Why SPs Should Consider Cisco's EPN

8|27|14   |   5:40   |   (0) comments


Sultan Dawood from Cisco discusses Cisco's EPN, which enables SPs to build agile and programmable networks delivering new network virtualized services using Cisco's Evolved Services Platform (ESP).
LRTV Huawei Video Resource Center
Huawei’s Showcase @ Big Telecom Event 2014

8|26|14   |   2.56   |   (0) comments


SoftCOM is Huawei's framework for telecom business and network transformation. Haofei Liu, Solution Marketing Manager, Carrier Business Group, Huawei, showcases Huawei's SoftCOM architecture in this video.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of Integrated Solutions on SoftCOM & NFV Monetization

8|26|14   |   4.43   |   (0) comments


Libin Dai, Director of Integrated Solutions, Carrier Business Group, discusses Huawei's SoftCOM and NFV monetization. Huawei believes that NFV monetization should be service-driven rather than network-driven, and that operators should have network transformation, service transformation and a compatible and collaborative ecosystem in place in order to deploy NFV.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of US NFV Lab on CloudEdge & the Future of NFV

8|26|14   |   4.06   |   (0) comments


Sean Chen, Director of US NFV Lab at Huawei, discusses Huawei's new approach to NFV in open collaboration. Huawei believes that through Proof of Concept tests, it could help operators learn and communicate with the industry more effectively. Sean believes that successful implementation of NFV should have its values reaching to end users and discusses how Huawei's ...
LRTV Huawei Video Resource Center
Huawei's Highlights @ Big Telecom Event 2014

8|26|14   |   3.34   |   (0) comments


At the Big Telecom Event in Chicago Huawei showcases its high-level strategy, the SoftCOM architecture, which helps operators reduce the cost of ownership of their network infrastructure and generate additional revenue in the ICT service environment. Huawei showcases over 30 pilot programs from across the globe, focusing on the industry-leading commercial ...
LRTV Custom TV
VeEX – Live from the Show

8|21|14   |   5:58   |   (0) comments


An overview of VeEX Test and Measurement solutions including TX300S multi-service test set with VeExpress cloud-based management system, UX400 universal modular platform supporting 100G testing, and the redesigned RXT modular platform.
LRTV Custom TV
Transitioning CE 2.0 Networks Into the SDN & NFV Era With Telco Systems

8|19|14   |   5:19   |   (0) comments


Telco Systems' Ariel Efrati (CEO) and Moshe Shimon (VP of Product Management) discuss virtualization and how the company's new Open Metro Edge solution utilizes the SDN and NFV concepts to accelerate and orchestrate service delivery through its innovative product portfolio and software applications.
LRTV Custom TV
NFV Myths: Is NFV Still Several Years Away?

8|11|14   |   1:13   |   (0) comments


Some say that NFV (network functions virtualization) is still several years away from being implemented on mobile operator networks. This isn't the case. Operators can get started on their paths to NFV now, as this short video from Skyfire shows.
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
A survey conducted by Vasona Networks suggests that 72% of mobile users expect good performance all the time, and they'll blame the network operator when it's not up to par.
Today's Cartoon
Hot Topics
Rogers, Shaw Take Aim at Netflix
Mari Silbey, Independent Technology Editor, 8/26/2014
Utilities to Pump $11.2B Into Smart Grid – Study
Jason Meyers, Senior Editor, Utility Communications/IoT, 8/26/2014
Verizon Launches QR Code Security Solution
Carol Wilson, Editor-at-large, 8/26/2014
Nokia's Maps Land on Samsung Devices
Sarah Reedy, Senior Editor, 8/29/2014
Verizon to Launch HD VoLTE in 'Coming Weeks'
Sarah Reedy, Senior Editor, 8/26/2014
Like Us on Facebook
Twitter Feed