Arista Networks’ move earlier this year in coining the term “blue box” for a switch platform sitting somewhere between the normal color ends of the spectrum has started to gain some traction in the market, but not in the exact color palette as initially expected.

Arista coined the blue box term earlier this year as a platform that takes advantage of its hardware but open to running third-party network operating system (NOS) software on top. This slots the platform in between white box platforms that use generic hardware that can support third-party software and fully consolidated black box systems that run proprietary software on top of a vendor’s specific hardware.

This blue box approach has found traction with hyperscalers like Meta that want a more robust hardware platform than what they can get with less expensive white box systems but still want to run their own NOS. Arista had previously noted that blue box offerings produced lower margins than its proprietary offering, they generally produced higher margins than white box offerings.

Arista CEO Jayshree Ullal told investors this week during the vendor’s third-quarter earnings call that Arista was “already quickly seeing success” with its new platform hue, but that at least one version of that adoption shifted toward what Ullal called a “hybrid strategy.”

Ullal explained that an unnamed neocloud provider came to Arista after it was unable to get a white box platform to handle what CEO Jayshree Ullal said were “AI mission-critical workloads.” Ullal noted that this specific neocloud’s trouble was in attempting to use a “non-Nvidia GPU” white box system, and “were just not getting their white box to work.”

“At first, they wanted to do an open NOS, but now they're adopting a hybrid strategy where it's not only an open NOS, but … EOS is coming to shine in its full glory in this use case,” Ullal said of Arista’s proprietary NOS. “In this case, I think it's a blue box to start with, but it's quickly going into a hybrid state of blue and branded EOS box.”

Ullal said this hybrid model does alter the economics for Arista as these blue and hybrid approaches scale.

“As we go to significant scale up volume, we expect more margin and economic capability coming together,” Ullal said. “In other words, the volume of these things would be larger, the pressure on margins would be greater, but we will carefully have a mix of scale up, scale out, and scale across to not affect the overall margin, but definitely take our fair share in that.”

That fair share remains focused on higher volume offerings, with Ullal again downplaying any potential threat from strict white box offerings.

“While there's always white box, Arista also continues to clarify our role in white box and how we will continue to coexist, like we always have the past decade or more,” Ullal said during prepared remarks. “The concept is clear. It's all about good, better and best, where, in some simple use cases, a commodity, white box is good enough, yet in other cases, customers seek the value of better. … The best is, of course, the Arista branded EOS platforms for the ultimate superiority.”

Arista’s confidence in this approach has backing.

Gartner earlier this year tagged Arista as a leader in its data center switch ranking, sporting healthy “ability to execute” advantage over fellow “leaders” Cisco, Juniper Networks, and Huawei.

Gartner specifically pointed to Arista’s 7000-series switches, EOS network operating system, and CloudVision management platform as garnering “high satisfaction” from customers, sporting a “well-aligned” roadmap for upcoming high-performance fabrics, and Arista’s market agility.

Gartner did caution that Arista lags when it comes to non-English support programs, sports a “narrowly focused” sales and geographic strategy, and potentially limited growth opportunities that could be hampered by competition from its current technology partners.

Arista did recently up its networking technology game with the launch of 800 Gb/s (800G) routers targeted at AI workloads. These routers include fixed and modular platforms designed to form the basis of more efficient two-tier leaf network designs, compared to the traditional, yet complex, three-tier architecture.

Arista is also part of the Ultra Ethernet Consortium, which was formed in mid-2023 to develop an ethernet-based and open full-communications stack architecture to meet growing AI ad high-performance computing (HPC) network demands. That group recently released its first 1.0 specification, which is already garnering successful network test claims.

VeloCloud integration ongoing

Outside of its blue box ambitions, Arista is also in the process of integrating its VeloCloud purchase. That deal, which was announced this summer, saw Arista purchase Broadcom’s VeloCloud SD-WAN platform for around $1 billion.

Arista’s management provided only the briefest mention of the VeloCloud integration efforts during the latest earnings call but had previously stated the integration would enhance its ability to connect branch offices back to campus headquarters.

Brendan Gibbs, area VP for Arista, previously explained that this connectivity includes multiple options, “whether it's cloud WAN connectivity from a cloud provider, whether it's a managed service from embedded service provider, or it's just direct enterprise connectivity over some sort of direct internet links from their own do-it-yourself-type of approach, it brings a multiplicity of connectivity options.”

That connectivity can plug into Arista’s campus switching products and Wi-Fi access points “for global SD-WAN and cloud WAN connectivity,” Gibbs said. “The VeloCloud edge solution really starts to be a perfect complement to the campus wired and wireless solutions that Arista has.”

Arista’s management had also previously touted VeloCloud’s VeloRAIN (robust AI networking) launch from last year, which infused AI into the SD-WAN platform. That infusion allows VeloRAIN to identify encrypted application traffic, which allows for it to prioritize edge AI applications that can support quality and service-level requirements.

VeloCloud is also maintaining an open secure access service edge (SASE) approach. VeloCloud technology executive Kangwarn Chinthammit explained that this includes support for a single-vendor SASE provided by VeloCloud or the ability to integrate other secure service edge (SSE) vendors.

Mauricio Sanchez, senior director for enterprise security and networking research at Dell’Oro Group, previously told SDxCentral that VeloCloud’ SASE angle could be a significant growth opportunity for Arista.

“It gets Arista one foot into the enterprise WAN landscape but they need to quickly decide do they want to play with what they have and just extract as much value out of the current technology that they have or do they want to commit to continue to expand their SD-WAN [market opportunity] to the full SASE [market opportunity]," Sanchez said. "Because right now, they only cover, let's just say 30% to 40% of the SASE opportunity, which that 30%, 40% is net new for Arista, but that means that there's another 60% to 70% that is still there for them to take home.”

That decision could mean another potential Arista acquisition, this time focused on cybersecurity or SSE.

“They need to have the conversations about, ‘well, are we going to be happy with the returns on just the constrained part of the market that we're going to go be able to go attack,’ or do they have the desire to go capture the flag at top of the hill and go all in by acquiring an SSSE vendor,” Sanchez said. “I don't think there's necessarily, near term, an easy answer for that. I think they need to really analyze what their appetite for risk and the expansion is.”