Ullal further explained that Arista management thinks a new multi-year growth cycle is underway. The cloud titans -- think Amazon and Microsoft -- will continue to be contributors to this story, though perhaps to a lesser degree than they were during the last decade now that the bulk of their massive data center infrastructure construction has been completed. But, in part because Arista has been continuously innovating and developing new tech, two new end-markets are emerging for the company: the campus cloud (smaller regional data centers for companies' internal use) and adjacent network routing; and network subscription software and services (which it has greater exposure to thanks to the acquisitions of Big Switch Networks and Awake Security earlier this year).
As for the cloud titans, an eventual upgrade cycle on their part (driven by new entry level computer science jobs networking hardware) could be the key to sustained double-digit percentage expansion for Arista overall, but those upgrades haven't begun yet. But that's OK, because the largest cloud services providers -- once its primary customers -- now account for a far smaller percentage of Arista's sales than they did in the past. In Q3, Ullal said they provided 37% of revenue, but enterprise and financial firms were also at 37%, and smaller cloud service providers were at 26%.
The campus cloud product portfolio specifically could provide some of the most dramatic upside for the company over the next few years. In its first year, the new segment hauled in $100 million in sales. Arista's top brass said it expects to double that annual rate by the end of 2021, and foresees it becoming a $500 million a year revenue generator further down the road. Given that the company booked $2.22 billion in sales over the last 12 months, that would be a significant addition to the overall business.
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