Partners: HPE-Arista Partnership Will Take Share From Cisco

Cisco Systems’ heated rivalry with Arista Networks just got turned up a notch as Arista and Hewlett Packard Enterprise Tuesday inked a new strategic partnership, a move that HPE and Arista partners say is the final ingredient needed to take significant market share away from the networking giant.

"This really gives us the last bullet in the chamber that we need to go compete for Cisco’s business," said Bill Tracy, director of solution architecture at Structured Communications Systems, a Portland, Ore.-based HPE/Aruba solution provider, ranked No. 241 on the 2016 Solution Provider 500 list. "The main goal between the Aruba Networks-HP merger was to compete with Cisco on that campus edge, but Cisco still had an advantage where they could round out the rest of the core switching solution and try to keep customers sticky on that side of the house – but that changes now with Arista-HPE."

Arista’s networking technology will be the data center infrastructure foundation for HPE’s software-defined infrastructure offerings. Starting Nov. 7, HPE partners will be able to buy Arista network switching products directly from Palo Alto, Calif.-based HPE.

[Related: 12 New HPE-Aruba Offerings That Will Drive Partner Profitability]

Rich Baldwin, chief strategy officer at Nth Generation Computing, a San Diego-based solution provider that is already selling Arista switches, said the partnership is going to accelerate sales gains for Arista.

"This is going to be huge for Arista," he said. "We recognized it as a leading technology last year and hooked up with them. Now that we have HPE behind this, it is really going to accelerate the success."

Baldwin said he expects the deal will double or triple Nth Generation Computing's Arista sales. "These guys at Arista can outdo Cisco," he said. "There is no question about that."

Cisco, San Jose, Calif., declined to comment on the HPE-Arista partnership.

The deal between the two companies was unveiled in front of 1,300 partners attending HPE’s Global Partner Conference in Boston Tuesday by Antonio Neri, executive vice president of HPE’s Enterprise Group.

In an exclusive interview with CRN, Neri said the Arista partnership is ’a significant threat’ that will put ’significant pressure’ on Cisco.

’[Arista] has gained share for multiple quarters in a row,’ said Neri. ’Now together, we are going to accelerate the taking of share in the cloud. Customers need compute and storage with the right fabric. … This is definitely a significant threat for Cisco.’

Although Cisco leads the data center networking market, it lost share in 2015, with revenue share declining from 62.1 percent to 60.7 percent and shipment share falling from 46.9 percent to 44.2 percent, according to research firm Gartner.

Santa Clara, Calif.-based Arista, meanwhile, continues to be one of the fastest-growing vendors in the data center, with product revenue growth of more than 40 percent in 2015 year over year.

’Arista’s been a scrappy dog from the beginning; they’re a competitor,’ said William Buckalew, COO of Comm Solutions, a Malvern, Pa.-based solution provider and HPE partner. ’With Arista-HPE and Aruba, we have the opportunity to design a competing architecture to Cisco. That’s an opportunity to intrude upon that traditional Cisco space.’

Partners said the strategic partnership and sales pact will turn up the heat by rounding out the HPE portfolio, enabling channel partners to go after Cisco’s hybrid cloud customers as well as its Unified Computing System.

’The technology leapfrog game will come into play with things like HPE’s Composable Infrastructure, which puts them another step ahead of where Cisco is, and bundling in Arista allows us to compete end to end in the full stack with Cisco and even with a Dell that has that complete offering to clients,’ said Structured Communications Systems’ Tracy. ’We can do everything under the HPE umbrella and roll in Arista for that high-performance core switching.’

Being able to sell Arista alongside HPE’s FlexFabric and Altoline product lines also opens the door for larger opportunities that previously went to Cisco, said another Arista partner.

’We run into some Cisco customers and one of the reasons they like Cisco is because Cisco has such a large global presence and they probably feel safer from a support standpoint – and so you can now mitigate that objection with the [HPE-Arista] partnership,’ said Chris Becerra, president and CEO of Terrapin Systems, a San Jose, Calif.-based solution provider and Arista partner. ’With Arista-HPE, they’re even bigger than Cisco and have more of a global presence and support system in place.’

Cisco and Arista are in the midst of a long-running, heated patent infringement legal battle.

In June, the International Trade Commission ruled that Arista networking switches infringed on three of the five patents cited in a lawsuit filed by Cisco in December 2014, recommending a ban on selling and importing several Arista products. Cisco is pushing for the halt of Arista products found with infringing technology while Arista says it has since released new versions with design-arounds to address features the commission ruled were infringed upon.

Reza Zarafshar, president of ACC Premier IT Solutions, a McLean, Va., HPE partner, said he sees the Arista deal as a "game-changer" for HPE.

"I think this is going to have a sizable impact on the market," he said. "This opens the door for us to have an important conversation with customers looking for software-defined solutions. It's a very important addition for HPE."