(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)