(upbeat music) >> Announcer: From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is theCUBE Conversation. >> Stu: Hi, I'm Stu Miniman and welcome to this special Cube presentation. We're talking with Pensando, and their event is "Future Proof Your Enterprise", to help us really understand where the company is, and the partnerships, what they're hearing from customers. Really happy to welcome back to our program Randy Pond, he's the Chief Financial Officer at Pensando. Randy, thanks so much for joining us. >> Randy: My pleasure, thanks for having me. >> All right, well Randy, obviously today, we're talking to people everywhere, they're remote so, not quite as plush as the last time we talked to you at the Goldman-Sachs office, in New York City, beautiful view in the background. That was a great backdrop, when you talk about bringing a company out of stealth, John Chambers there, your chairman, Antonio Neri >> Yeah Neri. >> Talking about the investment in the partnership. And Goldman-Sachs, an excellent customer there, here we are little bit more than six months later and that partnership with HPE is taking the next step. You've got the general availability, this month, of the HPE Proliant with Pensando Solutions. Bring us up to speed a little bit though, we'll talk about HPE maybe in a second but, your customers, your progress, you had, I believe it was up to your C round of funding, when you came out of stealth so, give us your viewpoint as to where the company is today. >> So today, I think, we're sort of, divide the conversation between financial and a business perspective. So financially, we're in great shape, the C round came together very well, we were way over subscribed. We raised our limits to secure additional funding, which has worked out really well, getting where we are currently with the pandemic. So financially, we're in great shape, our case burn has held steady and we've done a good job of forecasting, that's why I thing the Bird's pleased. From a business perspective, we've done a really good job delivering on our real maximum product perspective. So, the team has released the cloud production, we released the cloud to customers about a month or two ago. We just did a release to the enterprise space, through HPE. We got another release coming up the end of this month. There's releases scheduled for Q3 and Q4 of this year. Our second ASIC will come back, I think, the 15th of June, so we're going to get access to our new design, I think that's great news. You know our cloud customers are excited about that 'cause it provides a little more capability than the current device does. And we had a great Q1 and we're off to a great start on Q2. We overachieved in Q1, we look like we're going to overachieve again in Q2, both in terms of units and dollars, so we're in a pretty good place. >> Yeah, I'd like to see if we could break down say kind of the financial and the business piece. On the financial side piece, you've worked with this team for quite a long time, there's got to be a different financial model that you put in place when you know that you've got, really, your exit built in, add from the three spin-ins before, proof the product, get it out there and then, well, I've got an in-house feed with a full panel there, as opposed today. Is the model we should be thinking, what percentage of that is OEM? You talk about there's the cloud model, and the enterprise model and, how do you structure things a little bit differently for that type of model versus, maybe, what the spin-ins were or a traditional start-up. >> Sure. >> that might have a different, a few different models to choose from? >> So, we're much closer aligned to a traditional start-up environment. Now, the one unique point is the HPE relationship because they've been my partner, they are my primary go to market partner in the enterprise space today but, they're also a strategic investor. So, the reality is, in the enterprise space we have to sell the product through the OEMs, the average enterprise customer doesn't have the capacity to install themself. But that is a very different model than it is in the cloud side. So, it's an indirect sales model, most likely through HPE and other server providers, like Dell, Cisco possibly, and Super Micro. Every customer has their sort of, requested server manufacturer. On the cloud side, individuals build their own so, that's a, I ship to them and they install it themselves, it's a different software model, it's a different manufacturing model as in, we have a more traditional direct sales model on that side, but we've got a partner middle model on the enterprise side today. We've set 'em up as both, HPE sort of serves like a quasi Cisco environment for us, because we're depending on their engine to find our leads, and it's worked out really really well. >> Excellent, maybe bring us inside a little bit, where you are with (away from microphone) about customer acquisition leading up to now and what's the expectation now that HPE is fully ready to roll. >> So, we, I'm going to start the conversation again. There's the cloud side, so on the cloud side we have three committed customers today. One is in production, the other two are going into production later part of this year, they need the release we're going to give them in September/October timeframe but they've committed to us from a design perspective. And then there's a follow-on generational product in '21 where they really ramp hard. I already have a bind contract with two, I'm working on the third. And, on the enterprise side, we're modeling ourselves after the top 200 HPE customers right now. They normally align themselves around financial services, pharmaceuticals, transportation, sled, we're working through those customers. We have active talks with many of them today, they're in our sales pipeline, we manage that relationship together. Generally, HPE opens the door, we explain the technology to the technical team, they say they can see a place for us and they let us stand up a plat, and then we go from there. >> Excellent, so Randy we referenced the global pandemic going on right now. It's been a bit of a bifurcated model in the tech world. Though it's been definitely a tailwind, somewhat, from the cloud standpoint, there's many infrastructure pieces that have seen an immediate acceleration, things like work from home technology. So, there's certain devices and certain deployments. And there's other things that, of course, we put a pause button trying, too much uncertainty out there. What are you seeing at the market and how's that impacting you, as a relatively new start-up? >> Yeah, so in general, your point is well taken. The cloud players are telling us their demand is up dramatically and therefore the signal they're sending us is, they want to accelerate deployment and it's likely it's going to be bigger than we originally had estimated so, that's been great news for us. In the enterprise space it's really very different, you know we're not selling a lot of product to Walmart, or Gap, or the retail space, they're struggling mightily, any hotels, motels, Carnival Lines is not buying our product today. But, if you look at the financials, if you look at the pharmas, their demand's up quite a bit, they're both buying ahead a little bit to hedge their bets in the supply chain, for the situation today, and they're actually seeing the real demand go up. And, the banks especially have seen it go up 'cause their work from home has gone through the roof. So, it's been a good opportunity for us to sort of seize the moment and demonstrate how we can be part of their new implementations, and bring new services to 'em. >> Yeah, Randy, wonder if you can actually give us, a little bit, that voice of the customer and what is the problem you're solving? Because, we talked about, there's certain immediate initiatives that accompany the era, absolutely like, today, security is more important than ever. When people are working from home, the bad actors actually are trying even harder to get involved there, we talked a little bit about cloud, so what is that itch that Pensando scratches and, therefore, how do you fit into the current landscape? >> Sure, you know, with our customers today there's similar problems and dissimilar problems, between the cloud and the enterprise. The similar problems is that Pensando quickly solves things, like East West security inside of their environments, their computer environments, which is difficult to do today, it's expensive and difficult to do today. We've provided pervasively and wire rate, and that's sort of an easy sell, initially. Another one that's been pretty easy for everyone to look at is observability and telemetry because of where we're positioned, in the computer space, we see every packet, which provides us with a lot of knowledge about what's going on in their environment. So, that's been a pretty easy initial sell. In the case of the enterprise customers, we can sell other pieces of their solution that are either expensive, or introduce latency or management problems. Whether it's firewall technology, or load balancing technology, or micro segmentation technology, all of which we can do inside of our blade. And today it's done either through appliances or through virtual machines consuming CPUs. In the cloud space, we do all of that, plus we allow them to download their own image into our devices today, which is pretty powerful, we have a lot of memory and we have a lot of capacity, from an Arm core perspective. And we allow them to pick and choose the features and functionalities they want, and then run everything at wire speeds, at much faster speeds. The enterprise is running 10/25, the cloud partners are running 25/50 going to 100, where we're even more compelling, we think. >> Randy, want to get back to talk a little bit more about HPE. You spent long time working at Cisco, for a good part of that HPE was one of your bigger partners on that. So, tell us what it's like working with HPE, any compare/contrast would be welcome. >> You know, it's interesting, so the cultural environment of HPE, under Antonio Neri, is very similar to what we saw at Cisco. And he and John have a phenomenal relationship, it's a very collegial environment, it's a very bright environment. They move quickly, for a big business. Where it's vastly different is they are much tougher on the numbers side because they're under much more margin pressure, and compounded pressures, that we never had (chuckles) at Cisco, just in all fairness to them. But, if we look through the organization, like the executive that was assigned to our account, from a sales perspective, used to work at Cisco. I think one or two of his guys used to work with Cisco. There's program management people that used to work with Cisco, there're people in engineering that came from Cisco so, it's an environment that's similar enough that it's easy enough for us to navigate. And, we're connected sort of on all levels, which has really been useful, and we have a weekly standing dialog across all the different functions. So, we're pretty deeply embedded with HPE right now and it's gone very very well. >> Yeah, you said that, even with the global pandemic right now, that Pensando is a bit ahead of where you expected shipments to be. I'm curious always, when I talk to a CFO, how do you see macroeconomic impact of what is going on there? Any concerns on your end about supply chain, either for yourselves or for partners, like HPE? How do you see what we're currently going through and the recovery future? >> So, it's an interesting question. You know, getting this pandemic sort of processed through the supply chains like a pig through a python, there's just no way to get around it. I mean, you know we had the first breakdown when they closed the country of Malaysia and I just couldn't build final product. They literally just shut the place down so, it took us about 10 days to get ourselves up and running, from a skeleton perspective. The government worked with us, they let a small crew come into our manufacturing partner to get some finished goods off for one of our OEM customers. As we've come back up, we've seen lead times extend on some of the custom parts, it's just a fact of life. I think there's a little bit of an artificial demand that's driving the supply chain a little bit crazy right now because now people are panicked that what happens if it comes back, will I get caught again, can I get enough inventory to buffer myself for, you know, two weeks to three or four months, depending on how aggressive you want to be, or conservative you want to be in that space. And then, I think, as the supply chain trickles back online, you end up discovering that yes, I can build final product, and I can get the Asics, and the memory, but now I want to buy some, you know, RS232 devices and it turns out that sure he's got 'em but the magnetic, that goes inside of it, that comes from Western China, they aren't quite up and running just yet. But we're seeing legacy problems, nothing catastrophic, nothing that's been painful. We've had to move some work around to get an incremental volume for ourselves, we've added fab vendors, and a few other things. So, it's really made us focus on second sourcing everywhere we can because we thought we were small enough, and the volume perspective wasn't that big a deal, we'll just get second sourcing once we get the product to market. That's heated back up and we're doing all that work now. So, I think, knock on wood, our recovery has gone very well we don't see any big problems in the supply chain. Now, I think, the bigger the player, like an HPE, and the longer the window they were shut down, the harder they pull when they turn the supply chain back on. But I think the big players, Cisco, HPE, and others it's going to take them a longer time, I think, to really see how this trickles all the way through, 'cause you can't really get good visibility how much safety stock or buffer stock does everybody have, at every level of the chain. So, everybody pulls at once, you run dry in a week, a month? Is it fast enough to recover, from a production perspective? All those things, I think, they're still not quite resolved yet. >> Just one other related aspect of the pandemic, that I would love your viewpoint on. You know, work from home, obviously, is what everyone is doing right now. I'm curious if you think that, what the recovery would look like from that standpoint, is there anything from Pensando that makes you shift where you think about hiring it? I've been to the Cisco headquarters and the long street, with a lot of buildings, and a lot of people. And everybody's wondering, will that headquarters, and centralized structure, that we had before, is that forever changed? >> You know that's a great question. So, it's for certain changed, I think, in terms of therapeutic, or a vaccine, for the current covid virus. So, that's just a fact of life and we've been comparing notes with a lot of other companies about what they're doing to bring the workers back, who want it, who are comfortable and want to come back to work. 'Cause, even inside of Pensando, I've got some folks who're like, "Listen, I'm not comfortable coming back, "I've got kids at home , I don't want to take the chance." That's fine, we don't have a problem with that. And, quite frankly, we can make a case that, in some of our functional areas, we're more productive than we were before the pandemic. In India specifically, this has been a boon for us because they're not getting on and off buses, they're not spending three or four hours trying to get back and forth to work, they're happy working from home, we're happy having them at home. The guy who runs India for us says productivity's up, and employee satisfaction couldn't be higher. Our plans now is, we have to bring a small team back into our headquarters, in Milpitas, to bring up our new Asic. But, that's going to be 15 to 20 people, and not all at one time, we're going to spread them out. We're already articulating what parts of the building can and can't be used , one way hallways, masking, temperature taking, everything you would expect. The next phase for us is some sort of rotational work where we'll say, "We're going to bring 25% of the people in, "30% of the people in, you work the week, you're off "for two, you work the week you're off two." And so we can get through the back of this thing, it's unlikely, it's almost impossible, in my mind, we would bring back 100% of our employees in the building. Now, does that change the view longterm? It's a great question because, I think what it's forced us to do is to get more comfortable with remote work, so that we can truly make it an option of any one employee, in specific areas. Like, the lab guys have to be in the lab, and the IT guys got to be in the computer room, but if you're a software developer, or if you're a marketing guy, do you really have to be in the building? And I think it's pushed us to really learn to manage them more effectively, with remoteness. And I think it provides us, at least, with options going forward. When I hire the next 100, do I have to put 'em in a building someplace or do I just deal with them where they are and bring them into the fold? We've brought on dozens of people, since the pandemic started, and quite honestly, we onboard 'em , we train 'em, and we mainstream 'em remotely and it's worked out great. >> Excellent, all right Randy let's bring it back to the HPE partnership for the final question. >> Sure! >> Tell us what we should be looking at, through the rest of this year, what the general availability of this means to your business and the impact you expect it to have on your customer. >> So, from an HPE perspective, I think this is going to be great innovation that they're bringing to the marketplace, to their customer set. It allows them, I think, to separate themselves from the market, at least for some period of time, until the other players get pulled along by the end users. Their product has a pretty steep ramp, their front half and the back half of the year, for us, are dramatically different, in terms of size and ramp. And it really sets us up for a very large, we hope, fiscal '22, which , for us, will end in January 31st of '22. But we're going to know, I mean we go GA in just a few weeks and we're going to get a sense if we can turn these POCs into end customers. And we're also going to see the ramp of the cloud customers in Q4. So, you know, I really feel like, both for us and for HPE, the next three four months, as we start getting back to some regularity of interacting with customers physically, not just remotely, and we see the early benefits and some of the early profit ownership analysis on deployment erect technology. This could be dramatic for us and for them, quite honestly. >> All right, well Randy Pond, CFO of Pensando, thanks so much, really a pleasure catching up with you and getting to discuss about how Pensando's helping to future proof your enterprise. >> Thank you much, my pleasure, have a great day. >> All right, I'm Stu Miniman, check out theCUBE.net for all our coverage, thank you for watching, thank you. (soft music)

from New York City it's the cube covering welcome to the new edge brought to you by pensando systems hey welcome back here ready Jeff Rick here with the cube we are in downtown Manhattan at the top of goldman sachs it was a beautiful day now the clouds coming in but that's appropriate because we're talking about cloud we're talking about edge and the launch of a brand new company is pensando and their event it's called welcome to the new edge and we're happy to have since we're goldman the guys who have the money we're barry Eggers a founding partner of Lightspeed ventures and randy pond the CFO a pensando gentlemen welcome thank you thank you so Barry let's start with you you think you were involved at this early on why did you get involved what what kind of sparked your interest we got involved in this round and the reason we got involved were mainly because we've worked with this team before at Cisco we know they're fantastic they're probably the most prolific team and the enterprise and they're going after a big opportunity so we were pleased when the company said hey you guys want to work with us on this as a financial investor and we did some diligence and dug in and found you know everything to our liking and jump right in didn't anybody tell them this startup is a young man's game they mixed up the twenty-something I think yeah they sort of turned the startup on its head if you will no pun intended that's going right yeah yeah and Randy you've joined him a CFO you've known them for a while I mean what is it about this group of people that execute kind of forward-looking transformation transformational technologies time and time again that's not a very common trait it's a it's a great question so you know the key for these guys have been well they've been together since the 80s so Mario look and primitive this is the 80s I work with them at their previous startup before Christian two ladies and they're the combination of their skills are phenomenal together so you know one of them has some of the vision of where they want to go the second guy is a substantive sort of engineer takes it from concept first drawing and then the Prem takes over the execution perspective and then drives this thing and they've really been incredible together and then we added Sony at crescendo as a as a product marketing person and she's really stepped up and become integral part on the team so they work together so well it just makes a huge difference yeah it's it's it's amazing that that a that they keep doing it and B that they want to keep doing it right because they've got a few bucks in the bank and they don't really need to do it but still to take on a big challenge and then to keep it under wraps for two and a half years that's pretty pretty amazing so curious Barry from your point of view venture investing you guys kind of see the future you get pitched by smart people all day when you looked at John Chambers kind of conversation of these ten-year kind of big cycles you know what did you think of that how do you guys kind of slice and dice your opportunities and looking at these big Nick's yeah going back going back to the team a little bit they've been pretty good at identifying a lot of these cycles they brought us land switching a long time ago with crescendo they sort of redefined the data center several times and so there's another opportunity what's driving this opportunity really is the fact that explosion of applications in the network and of course east-west traffic in the network so networks were more designed north-south and they're slowly becoming more east-west but because the applications are closer to the edge and networks today mostly provide services in the core the idea for pensando is well why don't we bring the service deliver the services closer to the applications improve performance better security and better monitoring yeah and then just the just the hyper acceleration of you know the amount of data the amount of applications and then this age-old it's we're going to use the data to the computer do you move the compute to the data now the answer is yes all the above so you got some money to work with we do you got a round that he could be around you guys are closing the C round so I think 180 people approximately I think somebody told me close enough so as you put some of this capital to work what are some of your priorities going forward so we will continue to hire both in the engineering side but more importantly now we're hiring in sales and service we've been waiting for the product quite frankly so we've just got our first few sales guys hired we've got a pretty aggressive ramp especially with the HP relationship to put people out into the field we've hired a couple guys in New York will continue to hire at the sales team we're ramping the supply chain and we've got a relative complicated supply chain model but that has to react now that we're going to market all that might be pretty used to do that we're changing facilities we need to grow we're sort of cramped in a one-story building open up one floor of a building right now so the money is going to be used sort of critically to really scale the business down they can go to market okay but a pretty impressive list of both partners and customers on launch day you don't see Goldman HPE Equinix I think it was quite a slide some of that is the uniqueness of the way we went to market and did the original due diligence on the product and bringing customers in early and then converting them to investors you end up with a customer investment model so they stayed with us Goldman's been through all three rounds we've been about HP and last model we had NetApp has been um two rounds now so we've we've continued to develop as a business with this small core group of customers and investors that we could try to expand every time we move to the next round and as Barry said earlier this is the first time we had a traditional financial investor in our rounds the rest of them have all been customers they've been friends and family for the most part did you join the board too right I did yeah so what are you what are you excited about what what do you see is I mean just clearly your side you invested but is there something just extra special here you know react chambers put in a 10-year 10-year cycle yeah we've talked about it I mean I'm excited to work with the team right there best-in-class working closely with John again is a lot of fun a chance to not exhaust yeah yeah you know a chance to read redefine the data center and be part of the next way even as a VC you love waves and build my Connick company right and I think we have a real opportunity in front of us it it takes a lot of money to do this and do it right and I think we have the team that proven they can execute on this kind of opportunities from I'm excited to see what the next five years hold for this company good well it was funny John teased him a little bit about you know all the M&A stuff that he was famous for at Cisco he's like I don't do that anymore now I'm an investor I want IPOs all the way what's all 18 thinks it is 18 companies in his portfolio their routes they're going to IPO all the way yeah that's that's a good point actually this team has been prolific and they've delivered products that have generated fifty billion dollars and any walk into any data center in the world you're gonna see a product this team has built however this team has not taken a company public so that's really the opportunity I think that's what excites them Randy's here it's why Jon's here that's why I'm here we want to build a company that can be an independent company be a lasting leader in a new category yeah so last word Randy for you for people that aren't familiar with the team that aren't familiar with with with what they've done what would you tell them about why you came to this opportunity and why you're excited about it well this there is no higher quality engineering team in the world didn't these people so it's to get re-engaged with them again with an entirely new concept that's catching a transition and the market was just too good an opportunity to pass I mean I had retired for 15 months and I came out of retirement to join this team much to the chagrin of my wife but I just couldn't pass up the opportunity high caliber talent it's um every day is is interesting I have to say well thanks for for sharing the story with us and and congratulations on a great day and in a terrific event thank you thank you very much all right he's berry he's Randy I'm Jeff you're watching the cube from the top of goldman sachs in Manhattan thanks for watching we'll see you next time

>> From theCUBE Studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. (smooth music) >> Hi, I'm Stu Miniman, and welcome to this special exclusive presentation from theCUBE. We're digging into Pensando and their Future Proof Your Enterprise event. To help kick things off, welcoming in a friend of the program, Scott Raynovich. He is the principal analyst at Futuriom coming to us from Montana. I believe first time we've had a guest on the program in the state of Montana, so Scott, thanks so much for joining us. >> Thanks, Stu, happy to be here. >> All right, so we're going to dig a lot into Pensando. They've got their announcement with Hewlett Packard Enterprise. Might help if we give a little bit of background, and definitely I want Scott and I to talk a little bit about where things are in the industry, especially what's happening in networking, and how some of the startups are helping to impact what's happening on the market. So for those that aren't familiar with Pensando, if you followed networking I'm sure you are familiar with the team that started them, so they are known, for those of us that watch the industry, as MPLS, which are four people, not to be confused with the protocol MPLS, but they had very successfully done multiple spin-ins for Cisco, Andiamo, Nuova and Insieme, which created Fibre Channel switches, the Cisco UCS, and the ACI product line, so multiple generations to the Nexus, and Pensando is their company. They talk about Future Proof Your Enterprise is the proof point that they have today talking about the new edge. John Chambers, the former CEO of Cisco, is the chairman of Pensando. Hewlett Packard Enterprise is not only an investor, but also a customer in OEM piece of this solution, and so very interesting piece, and Scott, I want to pull you into the discussion. The waves of technology, I think, the last 10, 15 years in networking, a lot it has been can Cisco be disrupted? So software-defined networking was let's get away from hardware and drive towards more software. Lots of things happening. So I'd love your commentary. Just some of the macro trends you're seeing, Cisco's position in the marketplace, how the startups are impacting them. >> Sure, Stu. I think it's very exciting times right now in networking, because we're just at the point where we kind of have this long battle of software-defined networking, like you said, really pushed by the startups, and there's been a lot of skepticism along the way, but you're starting to see some success, and the way I describe it is we're really on the third generation of software-defined networking. You have the first generation, which was really one company, Nicira, which VMware bought and turned into their successful NSX product, which is a virtualized networking solution, if you will, and then you had another round of startups, people like Big Switch and Cumulus Networks, all of which were acquired in the last year. Big Switch went to Arista, and Cumulus just got purchased by... Who were they purchased by, Stu? >> Purchased by Nvidia, who interestingly enough, they just picked up Mellanox, so watching Nvidia build out their stack. >> Sorry, I was having a senior moment. It happens to us analysts. (chuckling) But yeah, so Nvidia's kind of rolling up these data center and networking plays, which is interesting because Nvidia is not a traditional networking hardware vendor. It's a chip company. So what you're seeing is kind of this vision of what they call in the industry disaggregation. Having the different components sold separately, and then of course Cisco announced the plan to roll out their own chip, and so that disaggregated from the network as well. When Cisco did that, they acknowledged that this is successful, basically. They acknowledged that disaggregation is happening. It was originally driven by the large public cloud providers like Microsoft Azure and Amazon, which started the whole disaggregation trend by acquiring different components and then melding it all together with software. So it's definitely the future, and so there's a lot of startups in this area to watch. I'm watching many of them. They include ArcOS, which is a exciting new routing vendor. DriveNets, which is another virtualized routing vendor. This company Alkira, which is going to do routing fully in the cloud, multi-cloud networking. Aviatrix, which is doing multi-cloud networking. All these are basically software companies. They're not pitching hardware as part of their value add, or their integrated package, if you will. So it's a different business model, and it's going to be super interesting to watch, because I think the third generation is the one that's really going to break this all apart. >> Yeah, you brought up a lot of really interesting points there, Scott. That disaggregation, and some of the changing landscape. Of course that more than $1 billion acquisition of Nicira by VMware caused a lot of tension between VMware and Cisco. Interesting. I think back when to Cisco created the UCS platform it created a ripple effect in the networking world also. HP was a huge partner of Cisco's before UCS launched, and not long after UCS launched HP stopped selling Cisco gear. They got heavier into the networking component, and then here many years later we see who does the MPLS team partner with when they're no longer part of Cisco, and Chambers is no longer the CEO? Well, it's HPE front and center there. You're going to see John Chambers at HPE Discover, so it was a long relationship and change. And from the chip companies, Intel, of course, has built a sizeable networking business. We talked a bit about Mellanox and the acquisitions they've done. One you didn't mention but caused a huge impact in the industry, and something that Pensando's responding to is Amazon, but Annapurna Labs, and Annapurna Labs, a small Israeli company, and really driving a lot of the innovation when it comes to compute and networking at Amazon. The Graviton, Compute, and Nitro is what powers their Outposts solutions, so if you look at Amazon, they buy lots of pieces. It's that mixture of hardware and software. In early days people thought that they just bought kind of off-the-shelf white boxes and did it cheap, but really we see Amazon really hyper optimizes what they're doing. So Scott, let's talk a little bit about Pensando if we can. Amazon with the Nitro solutions built to Outposts, which is their hybrid solution, so the same stack that they put in Amazon they can now put in customers' data center. What Pensando's positioning is well, other cloud providers and enterprise, rather than having to buy something from Amazon, we're going to enable that. So what do you think about what you've seen and heard from Pensando, and what's that need in the market for these type of solutions? >> Yes, okay. So I'm glad you brought up Outposts, because I should've mentioned this next trend. We have, if you will, the disaggregated open software-based networking which is going on. It started in the public cloud, but then you have another trend taking hold, which is the so-called edge of the network, which is going to be driven by the emergence of 5G, and the technology called CBRS, and different wireless technologies that are emerging at the so-called edge of the network, and the purpose of the edge, remember, is to get closer to the customer, get larger bandwidth, and compute, and storage closer to the customer, and there's a lot of people excited about this, including the public cloud providers, Amazon's building out their Outposts, Microsoft has an Edge stack, the Azure Edge Stack that they've built. They've acquired a couple companies for $1 billion. They acquired Metaswitch, they acquired Affirmed Networks, and so all these public cloud providers are pushing their cloud out to the edge with this infrastructure, a combination of software and hardware, and that's the opportunity that Pensando is going after with this Outposts theme, and it's very interesting, Stu, because the coopetition is very tenuous. A lot of players are trying to occupy this edge. If you think about what Amazon did with public cloud, they sucked up all of this IT compute power and services applications, and everything moved from these enterprise private clouds to the public cloud, and Amazon's market cap exploded, right, because they were basically sucking up all the money for IT spending. So now if this moves to the edge, we have this arms race of people that want to be on the edge. The way to visualize it is a mini cloud. Whether this mini cloud is at the edge of Costco, so that when Stu's shopping at Costco there's AI that follows you in the store, knows everything you're going to do, and predicts you're going to buy this cereal and "We're going to give you a deal today. "Here's a coupon." This kind of big brother-ish AI tracking thing, which is happening whether you like it or not. Or autonomous vehicles that need to connect to the edge, and have self-driving, and have very low latency services very close to them, whether that's on the edge of the highway or wherever you're going in the car. You might not have time to go back to the public cloud to get the data, so it's about pushing these compute and data services closer to the customers at the edge, and having very low latency, and having lots of resources there, compute, storage, and networking. And that's the opportunity that Pensando's going after, and of course HPE is going after that, too, and HPE, as we know, is competing with its other big mega competitors, primarily Dell, the Dell/VMware combo, and the Cisco... The Cisco machine. At the same time, the service providers are interested as well. By the way, they have infrastructure. They have central offices all over the world, so they are thinking that can be an edge. Then you have the data center people, the Equinixes of the world, who also own real estate and data centers that are closer to the customers in the metro areas, so you really have this very interesting dynamic of all these big players going after this opportunity, putting in money, resources, and trying to acquire the right technology. Pensando is right in the middle of this. They're going after this opportunity using the P4 networking language, and a specialized ASIC, and a NIC that they think is going to accelerate processing and networking of the edge. >> Yeah, you've laid out a lot of really good pieces there, Scott. As you said, the first incarnation of this, it's a NIC, and boy, I think back to years ago. It's like, well, we tried to make the NIC really simple, or do we build intelligence in it? How much? The hardware versus software discussion. What I found interesting is if you look at this team, they were really good, they made a chip. It's a switch, it's an ASIC, it became compute, and if you look at the technology available now, they're building a lot of your networking just in a really small form factor. You talked about P4. It's highly programmable, so the theme of Future Proof Your Enterprise. With anything you say, "Ah, what is it?" It's a piece of hardware. Well, it's highly programmable, so today they position it for security, telemetry, observability, but if there's other services that I need to get to edge, so you laid out really well a couple of those edge use cases and if something comes up and I need that in the future, well, just like we've been talking about for years with software-defined networking, and network function virtualization, I don't want a dedicated appliance. It's going to be in software, and a form factor like Pensando does, I can put that in lots of places. They're positioning they have a cloud business, which they sell direct, and expect to have a couple of the cloud providers using this solution here in 2020, and then the enterprise business, and obviously a huge opportunity with HPE's position in the marketplace to take that to a broad customer base. So interesting opportunity, so many different pieces. Flexibility of software, as you relayed, Scott. It's a complicated coopetition out there, so I guess what would you want to see from the market, and what is success from Pensando and HPE, if they make this generally available this month, it's available on ProLiant, it's available on GreenLake. What would you want to be hearing from customers or from the market for you to say further down the road that this has been highly successful? >> Well, I want to see that it works, and I want to see that people are buying it. So it's not that complicated. I mean I'm being a little superficial there. It's hard sometimes to look in these technologies. They're very sophisticated, and sometimes it comes down to whether they perform, they deliver on the expectation, but I think there are also questions about the edge, the pace of investment. We're obviously in a recession, and we're in a very strange environment with the pandemic, which has accelerated spending in some areas, but also throttled back spending in other areas, and 5G is one of the areas that it appears to have been throttled back a little bit, this big explosion of technology at the edge. Nobody's quite sure how it's going to play out, when it's going to play out. Also who's going to buy this stuff? Personally, I think it's going to be big enterprises. It's going to start with the big box retailers, the Walmarts, the Costcos of the world. By the way, Walmart's in a big competition with Amazon, and I think one of the news items you've seen in the pandemic is all these online digital ecommerce sales have skyrocketed, obviously, because people are staying at home more. They need that intelligence at the edge. They need that infrastructure. And one of the things that I've heard is the thing that's held it back so far is the price. They don't know how much it's going to cost. We actually ran a survey recently targeting enterprises buying 5G, and that was one of the number one concerns. How much does this infrastructure cost? So I don't actually know how much Pensando costs, but they're going to have to deliver the right ROI. If it's a very expensive proprietary NIC, who pays for that, and does it deliver the ROI that they need? So we're going to have to see that in the marketplace, and by the way, Cisco's going to have the same challenge, and Dell's going to have the same challenge. They're all racing to supply this edge stack, if you will, packaged with hardware, but it's going to come down to how is it priced, what's the ROI, and are these customers going to justify the investment is the trick. >> Absolutely, Scott. Really good points there, too. Of course the HPE announcement, big move for Pensando. Doesn't mean that they can't work with the other server vendors. They absolutely are talking to all of them, and we will see if there are alternatives to Pensando that come up, or if they end up singing with them. All right, so what we have here is I've actually got quite a few interviews with the Pensando team, starting with I talked about MPLS. We have Prem, Jane, and Sony Giandoni, who are the P and the S in MPLS as part of it. Both co-founders, Prem is the CEO. We have Silvano Guy who, anybody that followed this group, you know writes the book on it. If you watched all the way this far and want to learn even more about it, I actually have a few copies of Silvano's book, so if you reach out to me, easiest way is on Twitter. Just hit me up at @Stu. I've got a few copies of the book about Pensando, which you can go through all those details about how it works, the programmability, what changes and everything like that. We've also, of course, got Hewlett Packard Enterprise, and while we don't have any customers for this segment, Scott mentioned many of the retail ones. Goldman Sachs is kind of the marquee early customer, so did talk with them. I have Randy Pond, who's the CFO, talking about they've actually seen an increase beyond what they expected at this point of being out of stealth, only a little over six months, even more, which is important considering that it's tough times for many startups coming out in the middle of a pandemic. So watch those interviews. Please hit us up with any other questions. Scott Raynovich, thank you so much for joining us to help talk about the industry, and this Pensando partnership extending with HPE. >> Thanks, Stu. Always a pleasure to join theCUBE team. >> All right, check out thecube.net for all the upcoming, as well as if you just search "Pensando" on there, you can see everything we had on there. I'm Stu Miniman, and thank you for watching theCUBE. 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>>from the Cube >>Studios in Palo Alto and Boston connecting with thought leaders all around the world. This is a cube conversation. >>I am stupid, man. And welcome to a cube conversation. Really? Please welcome back to the program. One of our Cube alumni, Sony, Ge and Donnie. She is a co founder and also the business off of pensando. Tony, thanks so much for joining us. >>I thank you for having me here. >>All right. So, Sonny, we've had you on the program a few times. You know, those that have watched the program or followed your career? You've had a story career. You know, I've worked with you as a partner back through some of the spinning disk. You're one of the mpls group. And now, of course, Pensando we helped launch towards the end of 2019. I just want to take a step back and, you know, understand, You know, how did you find yourself in the startup world? >>You know, I got involved with startup ventures as part of the Mpls team. This is going back now. Gosh, 20 years ago, in calendar year 2000 my first venture was with Andy ammo. It was a very unique situation that Mario look up on myself or part of a set up on a startup venture. But all four of us, the Mpls group, did not have any equity in it. Look, and I basically what asked to operate within the with that venture to ensure its ultimate success from a product execution on the go to market perspective? Ah, lot of those elements did not exist from a go to market perspective in Cisco at that time, and it was basically a ground up effort for look and me to not have any financial association with the outcome off the Andy, um, a venture, but at the same time, take on the responsibility from the execution perspective and building up the whole go to market. >>Yeah, so, you know, talking about that these startups, you've been apart of two things. First of all, you were part of and, ya know, you ova in CNI. So did you need to learn Italian to be part of these projects? But more importantly, how did how did you work on that? You know, product customer fit, understanding what the build and, you know, you talk about right How do you make some things that festival? It is super challenging. >>Yeah, well, first and foremost, I think I've been fortunate in that the group that we're all part off it is definitely Italian Indian. And some folks, like from Indiana, for example, like Randy Pond, who is part of this venture with us at Pensando. If I if I would go back and take a look at the simple formula, I mean Mario look, and from, ah, they're veterans in this industry. And they typically focused on the conceiving off the idea and the brought up, uh, and starting with a clean slate approach. Of course, I participate from a market validation development, competitive landscape on a business on all related aspects, bringing the product to market on how that maps into customers and partners what we have consistently focused on market disruption. Particularly for the last two decades, the biggest focus has been on what are the market transitions occurring both from a business and a technology perspective on that is ultimately what creates the opportunity to emerge on and drive these concepts into reality and what yourself, in a market leadership position, is to capture the transition at the right time. >>Yeah, I think back. You know, some of your previous ventures and understand, you know, some of the waves of technologies coming together sometimes the maturity of a technology or being able to take advantage of something new to talk specifically about. Pensando what are you know, those waves of change and the technology coming together that makes the opportunity that you're in today? >>Well, I mean, if you go back and you take a look at really what has been exciting about this pensando opportunity has been to look at the unique ability that have been coming upon us. You know, with this market transition where the cloud is moving to the edge, what is ultimately driving this movement to the edge has been the application. Uh, the applications is is you know, whether it's driven by technology trends like five G, for example. Ah, and and the fact that bulk off what the customer's data is being driven is going to be at the edge. That when when you look at the cloud moving to the edge and evolving that with the transitions occurring, ah, this will require deep innovation. Deep innovation in the areas of distributed network processing security, like encryption, full observe ability while you have turned on encryption, traffic engineering and doing it at very low, predictable agency at the speeds of 100 gig and above all, doing it on a small footprint. We were really the only guys and gals who could do this. And we have done it, >>Yeah, so certainly some really big challenges that they laid out there bring >>us inside >>a little bit. You know, customers. You know, I think about, you know, when I've been watching edge computing for the last three or four years. Uh, you know, it's still relatively early days for customers, but there's a lot of technical challenges there, So help us understand how much you know it was you had technology that could help solve something and how much it is driven by some of the customers that you've been talking to over the years >>Now. One of the key things that we learned and this was going back to the early days of Cisco is that everything we were doing, we had the customer at the center off and at the heart off what innovation we were building from an engineering perspective. You want to build things that can have the most impact in the marketplace and within your customer base. So, uh, one of the early times we went back, who do getting our customers involved in the innovations we were bringing to bear. I still have recollections off a blueprint that we had iterated upon, uh, and sitting in a room, whether it was with the likes of Josh Matthew at Goldman Sachs all whether it was with some of our early cloud customers like the Oracle Cloud, to better understand with these innovation and these blueprints, what were their burning problems? What were they used, cases that we could really go and tackle? So it is one thing to think about market destructions. It's another to bring it to life and having customers engaged with you during the early phases. Off as you are incubating, something is a very important item because it helps you focus your biggest energy on the areas so that you can put your arms around what problems are worth solving. And how can you bring that to life with with customers? Use case. And this is something we have done time and over again. So this is a constant refinement off what we have been doing now for now, to over two decades. As I said, >>Yeah, it's, you know, fascinating here. And when you've got the chief business officer idle, Sony, You know, one of the biggest changes, obviously, is if I look back in the spin ins, you kind of understood how to go to market was what was involved the, you know, the Cisco execution machine that the sales process that they had in plug in a product, that they would help. All right, what you're doing now, you've got some, you know, feel, William partnerships. You have relationship with customers, help us understand a little bit. You know the update on the go to market, how you have. I have a solution that fits for not only the end users, but through multiple different, uh, you know, go to market partners. >>So I think it's, you know, it's very important that as a startup we stay very close to our customers and apart, not just men. We are thinking about what the innovation is and how can it solve their problems. But I think in a world where the way we want to go solve for what? The customer where we want the customer, where our customers want us to be our partnerships is a core part of it. I mean, if you look at from the early days we secured successfully funding from our customers and our strategic partners and it is these customers and strategic partners that are shaping the roadmap on are shaping the routes to market on. What we're doing is we're successfully not only delivering the product, so these strategic customers and partners, but we're also then replicating it across the verticals. If you think about in the enterprise space, our focus has been the focus on regulated market markets where security is essential. Real time, observe ability that can increase your security posture is a very important element. So taking the blueprints that we're taking into global financial services customers, the healthcare industry, the the education market on the federal market, then those are the industries that really care about, and I in regulated markets where we can take the blueprint that we have already built on an amplify across those customers. So there again includes alignment and a partnership with HP. We're working very closely that, while recognizing that we will be doing strategic elements only with partners like HP, we're also on boarding and getting certifications done with Dell because most enterprises have at least dual source vendors from a server, so that that is one aspect. The other aspect is working in a high touch model with the cloud customers and having the opportunity to deliver to them Ah, and onboard them from a production worthy perspective while taking that same blueprint and applying it to other cloud customers and other service provider edge providers that can take advantage of the similar capability. >>Yeah, um, I'm curious. Sony, you know, obviously, the cloud is a space that has been going through a lot of change and accelerating. You know, I'd say much faster than traditional networking did. So you know, curious what you see what you're hearing from customers when they talk about you know, their needs for your solution, what they're doing with multi cloud environment. What is that? That landscape you. And I guess we would love to hear a little bit about how you would compare and contrast yourself. The other solutions out there the one that comes to mind, of course, is you know, eight of us what they're doing with the Annapurna chip in there nitro offering as part of their out. >>You know, as I mentioned earlier, I think the cloud is pushing to the edge. There's a high demand for a lot of packet processing needs with these New Age applications. Customers want to build on and give the you know, we want to be in a position to provide through the democratization and open availability off our products to multiple cloud providers, our technology and as they are experiencing tremendous growth, they're seeking to build cloud with more capacity, with greater degree off security and services functionality. And the ability to process a lot of data at the edge is with millions of simultaneous connections happening at a very small footprint. And that's where we come in. The value that we are essentially providing who not only the existing cloud strategic partners but additional cloud customers we're taking into production this year is that we are enabling them to leapfrog the nitro technology on multiple, whether it is the ability to ah have predictably low latency on and consistently low jitter in the nanoseconds. That is the eight times superior than what a nitro can do today, or the ability to pack their toe process up to nine times more backend processes in the millions of on the ability to do it in a power footprint, which is almost 1/3 that of what you would need on AWS nitro, where they need five times more nitro elements than then we can with a single device, Um, or whether it is the ability now to handle not just power and latency, but millions off flows that can run simultaneously on maintaining the state of all of those and the power of the end, the ability to run multiple services. Uh, with security turned on at the same time are all elements that really differentiate us on. This technology is now readily available to all of us. >>All right, so I understand some of the technical issue items that you're stating there. What I'm curious about is when I look at out both, most customers don't really think about the night. It's that Amazon's providing an extension of their solution into my environment, and they manage everything and so you know, you can't talk about multi cloud environment without talking about Amazon is every customer almost everything right? More than one cloud in one of them is almost always Amazon, though. How does your solution fit into that whole discussion? And then? >>So I think that, you know, one of the things that becomes very important is that if I put my customer enterprise customer hat on, I want to be an enabling my private cloud the private cloud that I build. You have the ability to not just have the option to the port and Amazon cloud, but I typically already and minimal child and barn. So while Outpost and Nitro Nitrogen really enabling, are supposed to deliver those services on our customer's premises, it's only allowing that customer to be locked into one way off dealing with one public cloud company. But if I had to go and think about as I build out my hybrid cloud strategy as an enterprise customer, I want to have the same building blocks on the same policy models that are consistent with all the with the entire dress off cloud vendors that I'm dealing with. The bulk of our customers are essentially telling us I don't want to be locked into a single public cloud company from a hybrid strategy. I want to have the ability to drive a public, private cloud architect that is cloud like from a policy delivery perspective. But at the same time, I want to have the flexibility off deploying a multi cloud and BART, and what we would provide them is the consistency off that same policy model that you would only find in a public cloud with the freedom to not have to buy themselves or lock themselves up into a single public cloud costs. >>So your team, you said, over two decades of experience, there have been some global impacts that have happened during that you got together in 2000. 2001 was right there in front of you that the 2008 you know, down in there, though you're in 2020 obviously the global endemic, as you know, broad financial ripples. How's this impacting Dondo? How's that impacting your discussions with your partners and your customers? >>Well, you know, honestly, I would say that we, like everyone else, have been affected by the pandemic, and we pray that everyone recovers soon with minimum lost to themselves and their families. And this is something very personal. This is here. I feel very passionate about hoping that everybody comes through with this on and their families are all OK. That's all the most important thing in my mind now for us, from a pandemic perspective. What this has done is it has made us more resolute to continue to execute remotely to the best of our ability to meet our customers. Expectations. The advice that I would give to other startups is Keep your head down. Focus on the 80 20 rule, execute on 20% of the things that need to be done, that we'll have 80% of the impact to your business, including undeterred product execution. Stay close to your customers and your partners. Spend your cash judiciously. You know, be very careful on where you're spending your money to make it last. As long as you can ride this pandemic out and double down on being close to your partners and customers. Fortify your sales plans. Meet your customers where they are not where you thought they were, but where they really are and partner with them on this journey and partner with your supply chain. You're going to need that. So this is your time to really be a partner to them, as opposed to see how can you change them? No, no. The really partner with your supply chain Because you're gonna need that. >>Yeah, that's a very sound advice there, Sony. While we're talking advice that, you know, you're very successful career, I'm wondering what advice you would give the other women look at pursuing careers. In fact, specifically, if you know they wanted, you know, start a startup, be a founder, whether that in Silicon Valley or outside, what advice would >>you know? My advice would be to have an undeterred focus. Focus is extremely important. Look, I used to always remind me, Sony, when you're focused on two things, you're d focus. So focus on data. Focus, be driven. Believe in the vision that you have set out for yourself and your team on and keep your eye on the customer. I think in customers successful on your success. That's the message I would give. I would give that same message. My female and the male colleagues. >>Alright, well, we know that you and your team. Sony are very focused, so I'll give you the final word. Gives a little look forward if we go forward. You know, 18 to 24 months. What should we be expecting to see from PENSANDO and your solution? >>Well, in the next 18 to 24 months, we would like to meet and hopefully also exceed our customer's expectation in terms of product execution and the ramp off course. Profitability will be a very important aspect that we're going to keep a very close eye. I think it's too early to be thinking of an ideal, and our focus remains to be on customer success. We have been in the market for a little over. I was a little less than six months. Ah, with the product, September 2019 October 2019 is really when we launched the company on and, uh, the customer always is at the center of everything we do. So that's where we're gonna be focusing on product execution and ramp ramp off product, ramp off estimates. >>Well, so needy. And Dani, it's a pleasure to catch up with you. Thank you so much in the state. >>Thank you. You too. >>Alright. Be sure to check out the cube dot net for all the interviews, you can go see the launch videos that did at go back office in New York City from 2019. If you go to the cube dot net and many more interviews from Sony and her team, I'm stew Minimum. And thank you for watching you. Yeah, yeah, yeah, yeah, yeah.