In an interview from Motley Fool Live, recorded on May 18, Fool.com advisor Tim Beyers and Arista Networks (ANET +3.22%) CEO Jayshree Ullal discuss some of the company's other customer sectors that are driving revenue outside of the impressive cloud business that Arista has built over the years.
Tim Beyers: Let's talk a little bit about the cloud titans. You've done a really good job diversifying revenue outside of the cloud titans. If I read the filings right, Microsoft (MSFT +0.11%), was it over 20%? It's now down to 15% of revenue last I looked, that is now under 10%. Clearly, the cloud titans are important but not the massive driver of revenue that they once were. Talk to us a little bit about what you're doing to diversify revenue and what do you expect looking forward?
Jayshree Ullal: Well, I'm very proud of the cloud titans and I hope they continue to be a large part of our lives. You might have seen in the announcement that Microsoft gave us a ringing endorsement and continues to view us over the last decade and, hopefully, the next decade as a strategic partner, not only for the cloud but also increasingly for the intelligent edge. Our development with Meta (FB +0.40%) that we do a lot of joint products together with them as well. Both of them are alive and well and I think it will be a very strategic part of our growth this year and for years beyond.
But having said that, we want to take the lessons learned from that in those cloud principles and apply them to other customer sectors. They may not be as large with other customers, but still, the principles apply, the principles of scale, performance, quality, automation, throughput, latency, AI principles, security principles.
This is what has led to the diversification where the cloud titans can still be 30, maybe even 40% of our business or more in a given year. But the enterprise and financials are doing extremely well and they can be literally neck-to-neck with these cloud titans.
Then we have a third sector, what we call the provider sector, where the service providers in the specialty clouds, these are folks that may not be as large as the cloud titans, but they're still building their own database cloud or clouds that are special to their applications, hosting cloud, content cloud, you name it.
What's nice is I think we have developed a nice end-by-end matrix where we have diversification of our customers and we have diversification of our product line as well. Our core data center products are still very much north of 60% of our business.
But we're expanding into adjacencies such as routing and campus, as well as, as we discussed earlier, software, and services, and renewals. Increasingly over time, our core business will be 60%, but another 40% comes from adjacencies and new markets as well.
