Cisco rival Arista reportedly picks banks for 2014 IPO

|About: Cisco Systems, Inc. (CSCO)|By:, SA News Editor

Reuters reports Arista Networks, a maker of data center switches that has increasingly become a thorn in Cisco's (CSCO +1.3%) side, has hired Morgan Stanley, Citi, and Credit Suisse to handle a 2014 IPO.

The high port densities and low latencies provided by Arista's switches have helped the company score dozens of blue-chip customers, many of which are in the financial services vertical (traders place a premium on low latency). Whereas Cisco relies heavily on proprietary ASICs, Arista relies on off-the-shelf network processors from the likes of Broadcom (BRCM) and Intel.

Analysts think the company could see a $2.5B IPO valuation; with ISI estimating Arista will do $300M+ in 2013 sales, that could translate into an ~8x price/sales multiple.

Cisco's recent Insieme switch launch was aimed partly at Arista. Cisco also launched a low-latency data center switch a year ago in an effort to better compete against Arista.

Ahead of the Insieme launch, Arista unveiled new small-form-factor switches offering better programmability than their predecessors, and enabling simpler data center network architectures.