To help network operators better manage the variable costs of cloud platforms, Arista said Tuesday it will bill customers separately for software licenses and hardware sales. The company also hinted once again that it might offer its EOS networking operating system on white-box hardware.
The hardware/software split allows network operators to budget hardware as capex paid upfront, and software as a monthly recurring opex payment over years. (See Arista Offers EOS as Subscription Software.)
The new pricing is designed primarily for Tier 2 and 3 cloud providers who need to build infrastructure and who get revenue on the same recurring payment model that Arista Networks Inc. is moving to for software, Jeff Raymond, VP of EOS (Extensible Operating System) software and services, says.
"Customers say we're giving them a predictable payment model," Raymond says. "Spikes of capex procurement are reduced. If you're a cloud provider and revenues come in over time, you can lower upfront costs and infrastructure while the revenues come in over time and catch up."
Arista structured pricing for a three-year break-even -- for the first three years of deployment, a network operator will pay less for the hardware and software separately than they would for traditional pricing, where they buy the hardware at greater cost and the software is included. After three years, the new pricing model becomes more expensive for network operators. But Arista figures the hardware has a three-year lifecycle, so customers will never reach that point.
The software is a monthly subscription that includes ongoing 24x7x365 support. Hardware includes three years of support.
Separating hardware sales and software licensing paves the way for "further disaggregation" -- the possibility of making EOS available on other hardware, namely white boxes, Raymond says.
"Technically and architecturally EOS is capable of running on other hardware. We're not announcing it. We track use cases and listen to our customers. There hasn't been much demand. But if there were, we have the software," Raymond says.
The new Arista strategy follows Cisco Systems Inc. (Nasdaq: CSCO) making similar moves in January, introducing its ONE software strategy to separate software and hardware licensing and streamline software licensing too. (See Cisco Gives Its Software Licensing a Makeover.)
Arista enhanced EOS in December to improve programmability and allow network operators to deploy applications rapidly using DevOps. (See Arista Gets With the Programmability Program.)