Arista Networks’s CEO Jayshree Ullal, who was once close to John Chambers, is grabbing Cisco’s networking business and winning over customers
Mr. Chambers, 67, now Cisco’s executive chairman, is credited with the company’s extraordinary growth phase in the 1990s, largely by buying smaller companies, including Crescendo Communications where Ms. Ullal worked.
Ms. Ullal, who rose to become one of Cisco’s most valuable executives over her 15 years at the company, ran the switching division, which allows companies to shuttle data at high speeds. By the time she left, switching was Cisco’s biggest business, with more than $10 billion in annual revenue, a big reason why Cisco recovered from the dot-com bust.
.. Ms. Ullal, raised in India, was an outspoken engineering and marketing whiz who disliked rigid rules.
Ms. Ullal grew frustrated as Cisco began moving beyond its core switching and routing business into areas such as high-end videoconferencing and consumer electronics, former executives who worked with her said. About a year before she left, Mr. Chambers had created dozens of internal councils and boards, which was at odds with her command-and-control approach.
.. Ms. Ullal urged her employees to avoid attracting Cisco’s attention at first, said a person familiar with her thinking. As the giant in the field, Cisco could have “destroyed us with a stray thought,” this person said.
.. Arista’s technology was faster, more flexible and less expensive than Cisco’s
.. Facebook engineers described Cisco as “behind the curve and on target to become irrelevant” in the data center
.. Other customers started complaining. An email from a customer support engineer in August 2013 to dozens of senior managers, including Mr. Robbins, the future CEO, said Morgan Stanley had lost confidence in one of the switching products “after more than 12 months of ongoing software defects, instability and a lack of needed features.” The bank halted plans to use 400 Cisco switches and said it might turn to Arista.
.. Cisco interviewed dozens of executives to understand the problem. The brutal conclusion in a September 2013 report: Cisco had good ideas and talented employees but a risk-averse culture, indecisive leaders and too big a focus on incremental products.
.. Inside Cisco, a “Beat Arista” document in January 2014 warned that the impending IPO would provide the upstart the cash to strike Cisco’s most profitable product lines. “Time is now to target their top 100 accounts—slow momentum, impact revenue & market share and help drive an unsatisfactory IPO,” one slide said.
.. Arista prevailed over Cisco in a trial late last year over copyright claims and one patent claim in one of the lawsuits.
.. Arista’s share of the overall data-center switching market has grown from nothing in 2010 to over 9% in 2016, while Cisco’s share has fallen from about 80% to about 58%, according to research firm International Data Corp.