Arista Networks’ founder Andy Bechtolsheim (right) also co-founded Sun Microsystems and was one of the first two people to invest in Google. Here, he is speaking with Intel CTO Justin Rattner on stage at the 2013 Open Compute Summit in Santa Clara, California.

Arista Networks’ founder Andy Bechtolsheim (right) also co-founded Sun Microsystems and was one of the first two people to invest in Google. Here, he is speaking with Intel CTO Justin Rattner on stage at the 2013 Open Compute Summit in Santa Clara, California.

Arista Shares Rally on IPO Day

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Arista Networks, a Silicon Valley company that makes switches for large “cloud-scale” data centers and has names like Facebook, Morgan Stanley, Netflix and Equinix on its client list, saw its shares debut at about $12 more per share than expected in Friday’s initial public offering on the New York Stock Exchange.

The Santa Clara, California-based company announced Thursday that it had priced its shares at $43 per share, but when trading kicked off Friday morning, it traded at $55.25 per share. At one point during the day, its share price reached $60 before sliding down to slightly less than $55 in afterhours trading.

The day made for a successful IPO for the company that was started by Andy Bechtolsheim, one of the founders of the former Silicon Valley superstar Sun Microsystems, which is now part of Oracle. He is also famous for having been one of the first two people to invest in Google in the late ‘90s, before founders Larry Page and Sergey Brin incorporated the company.

Arista’s current CEO is Jayshree Ullal, who came from Cisco, where she led the data center and switching division as senior vice president. Bechtolsheim acts as Arista’s chairman and chief development officer.

The company’s product portfolio consists of its Extensible Operating System and 10, 40 and 100 Gigabit Ethernet switches. EOS is based on Linux, which gives users flexibility to use it with Linux-based applications and open source management tools.

Top brands on customer roster

As of the end of March, the company had about 2,500 customers, according to a U.S. Securities and Exchange Commission filing. It caters to large Internet companies, service providers, financial services firms, government agencies, media and entertainment companies, among others.

Arista has managed to close some of the top names in each of those business verticals. It has sold switches to eBay, Facebook, Microsoft and Yahoo in the Internet category, Barclays, Citigroup and Morgan Stanley in financial services, Netflix, ESPN, Comcast and AOL in media, and Equinix and Rackspace in the data center and cloud infrastructure services space.

Revenue for 2013: $360 million

Its 2013 revenue was about $360 million – up about 87 percent year over year. It reported about $117 million in revenue for the first calendar quarter of this year alone, which is more than 90 percent more than the revenue it generated for the first three months of 2013.

Gartner included Arista in its 2014 “Magic Quadrant” for data center networking, classifying the company as a visionary with one of the most complete visions among its peers, behind only VMware in that respect. Arista and VMware shared their “visionary” portion of the quadrant with HP, Juniper and Brocade.

Gartner classified Cisco, the data center switch market incumbent, as a “challenger.”

Arista owes its success in the service provider and financial services verticals to its focus on the price-performance ratio, according to the market research firm. The company had the highest market share in 40 GbE port shipments in the third quarter of 2013, owning nearly 30 percent of the market.

Integration with key technologies

One of the biggest technological moves Arista made recently was integration with VMware NSX, the Palo Alto, California-based enterprise IT giant’s network virtualization technology for software-defined networking. Arista co-authored VXLAN, a key protocol NSX uses, and was the first vendor to demonstrate integration with the protocol.

EOS also integrates with OpenStack, the popular open source cloud infrastructure architecture, and Microsoft System Center, the widely used collection of tools for corporate IT admins who manage Microsoft Servers (formerly Windows Server) environments.

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