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Thought Leaders in Cloud Computing: Prem Jain and Soni Jiandani, Co-Founders of Pensando Systems (Part 2)

Posted on Tuesday, Jun 30th 2020

Sramana Mitra: I followed Andiamo quite closely. I have a question in the model that you have fine tuned because of your very long relationship with Cisco. How do you set these spin-ins and spin-outs? To the extent that it is comfortable for your to answer, how do you handle these negotiations with Cisco?

Prem Jain: It’s a very delicate question. We wanted to make sure that we are fair across the board. Any spin-in that we have done, the idea was to make sure that it’s not just giving the technology to the company but really building the business. A lot of people don’t want to take that risk.

Our payoff is based on the revenue together with some multiplication factor. If you do very well, there’s a cap on how much you get paid. The important aspect of this was to make sure that it’s not negative for the shareholders. We are bringing a new business. It creates jealousy inside the company.

Once they see the result, it dies down. This recipe worked very well for them to get into multiple segments in the market. The biggest one is the server segment. People were saying, “You guys are crazy. You’re going after HP and IBM.”

It’s very difficult to navigate. You need to know how to innovate and execute. A lot of people get the ideas, but to execute the idea is something that we perfected out as a part of our experience. After that, we did Insieme, which was successful.

We left Cisco in 2016. That business was growing rapidly. We had done our jobs as a part of it. When we left, we thought we were retiring. Then we saw another transition occurring in the cloud. We also look for technologies that are coming back. Those are new areas.

The other idea was there will be a new way to solve that particular problem architecturally. We were convinced this transition would need new technologies and new innovations. Pensando means thinking. This is a new way of thinking.

Sramana Mitra: This is also the same model as your previous ones where it’s also a spin-out?

Prem Jain: No, it’s not. 

Soni Jiandani: We spent 23 years at Cisco. Out of that 23, the first 12 years went into building the company into a switching company and a voice company. The last 10 years were to enable Cisco’s entry in markets that Cisco was not in, which was the model of the spin-in.

The company was not in the business of virtualized computing. The company was not in the business of building out a data center portfolio of products. The company was not in the business of software-defined networking.

When you think about the new adjacencies that were brought over a 10-year period where every single transition was a multi-billion-dollar product line, that was an important aspect to keep in mind. It was a win-win model where you bring in 200 or 300 people into Cisco. They are here for 4 to 6 years to ensure that they are building these technologies into multi-billion dollar businesses.

Sramana Mitra: In your process, you emphasized greatly on validating customers very early on. In this round with Pensando, what did the customers tell you? What customer problem did you zero in on?

Soni Jiandani: The customer problem was that the cloud was becoming the inevitable trend. That was evident when we started Pensando. Customers were toying with the notion of, “If I have to live in a hybrid or multi-cloud environment, how can I bring the same characteristics of a public cloud into my own data center?”

That was the thought process of the enterprise. When we talk to cloud customers, they told us that the notion of a model where all the intelligence is going to move to the edge. I cannot, as a cloud company, have the ability to do what Amazon may have done with the acquisition of Annapurna.

I do not have access to that technology. How can Pensando step in to help me build out the next generation cloud so I can leapfrog to Amazon? Those were the two problems that were evidently open and visible to us.

These customers were on the drawing board with us ensuring that their use cases were being spelled out. When we were designing this technology, we were designing it with customers’ use cases and problem statements at the get-go.

This segment is part 2 in the series : Thought Leaders in Cloud Computing: Prem Jain and Soni Jiandani, Co-Founders of Pensando Systems
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