Total available market estimated to reach $30 billion by 2023
Arista Networks (ANET) expects its total available market to reach $30 billion by 2023, up from $16 billion in 2018. The cloud networking market will continue to expand, and ANET expects to gain market share in the switching category. Cognitive campus places in the cloud will also provide Arista with the opportunity to grow its revenue.
Hardware networking companies will also benefit as enterprise workloads migrate to public and hybrid clouds. ANET generated sales of $2.15 billion in 2018 and accounted for 13.4% of the total market. If ANET manages to keep this market share, its sales should grow to $4.0 billion by 2023. The company’s revenue growth will be higher if it manages to grow its market share at a faster pace.
Arista gains market share in switching
Arista competes with tech giants such as Cisco (CSCO) and China’s (FXI) Huawei in the networking space. Arista grew its dollar share in the high-speed data center switching market to 16.7% in 2018, significantly higher than its dollar share of just 3.5% back in 2012.
In comparison, Cisco’s dollar share dropped from 78.1% to 49.3% in the same period. Arista’s market share in switching also rose from 4.9% in 2012 to 17.2% in 2018, while Cisco’s share dropped from 71.4% to 42.2%.
Arista is likely to benefit from Huawei’s ban by the US government. It can now increase its customer base and gain market share.