Gabelli: Arista's switch use cases growing, white-box not a threat

After talking with Arista (NYSE:ANET) customer engineering chief Anshul Sadana, Gabelli's Hendi Susanto is "incrementally more positive" on the company's growth opportunities.
Among other things, Susanto argues use cases for Arista's switches go well beyond traditional data center deployments. "One customer may work with Arista on three generations of future projects. Various use cases include computing, networking, inter-cluster, inter-data center, long haul, and internet routing networks ... In the context of Arista leaf-spine architecture design, there can be as many as 5-7 tiers of switches."
On routing use cases in particular: "Networking customers are exploring adjacencies of routing and the idea that switching and routing are blending. We note that Comcast is exploring the idea of hybrid open router architecture with Arista’s platform."
He also insists white-box switches, such as those enabled by Arista client Facebook's switch designs, aren't a threat. "Two large cloud titans are dominating this market with ~90% market share. We think total cost of ownership and operational risks can be a burden for average customers." Various software-defined networking (SDN) platform providers are looking to make it easier for companies to deploy white-box hardware.
Arista rose 1.3% today. Shares have more than recovered the losses they saw two weeks ago after the company provided cautious Q2 guidance to go with a Q1 beat.