Prem Jain of Pensando Systems: “Be frugal in the right ways”

Be frugal in the right ways: When you spend money as a business leader, you have to treat it like your own money. To be highly productive, you have to be frugal. At the same time, you have to spend money to make money, which means that frugality has limits. For example, during a pandemic […]

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Be frugal in the right ways: When you spend money as a business leader, you have to treat it like your own money. To be highly productive, you have to be frugal. At the same time, you have to spend money to make money, which means that frugality has limits. For example, during a pandemic like the one we’re experiencing, it’s crucial that startups cut spending and preserve cash. But you shouldn’t squeeze your key suppliers by renegotiating contracts. By sticking to your word, you build loyal relationships that will outlast the pandemic. Instead, startups can do things like freeze hiring to make sure the company maintains a frugal approach that also maintains important business relationships.

As a part of our series about business leaders who are shaking things up in their industry, I had the pleasure of interviewing Prem Jain.

Prem Jain is CEO and Co-Founder of Pensando Systems, a cloud and enterprise data center startup founded in 2017 by four former executives from Cisco Systems. Prior to founding Pensando Systems, Prem spent 23 years as part of the “MPLS” team who were financed by Cisco Systems to create innovative new start-ups. Known as the “heart, soul and brains” of Cisco, the team formed several successful startups that the company bankrolled and then bought back for significantly more money when they hit financial mileposts. Prem is the recipient of two patents and is a member of the IEEE organization.

Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?

I started working in the telecommunication industry in 1977 and remained there until I began my first startup, David Systems, in 1983. There I met my longtime partners Mario Mazzola and Luca Cafiero, who make up the ‘M’ and ‘L’ in the MPLS team that has spearheaded multiple tech startups. In 1993, we founded a company called Crescendo Communications that disrupted the hub market and helped lead a transition to switching technology. This was our first startup acquired by Cisco, who made its technology a core part of the business and the company’s largest revenue stream at the time. At Crescendo, the full MPLS team came together with Soni Jiandani as the ‘S’, who is now the Chief Business Officer of Pensando.

After that, we launched Andiamo Systems, where I helped develop the groundbreaking storage networking tech that would become Cisco’s first storage product. Then we decided to take a big leap, and go into the server business with Nuova Systems, which we had launched to spin back into Cisco. We had never designed servers, and we didn’t fully understand it right away, but we thought it was very important for Cisco to get into the server business given the developments in the cloud industry. I helped pioneer a “virtualized computing” server that is widely used today, and helped Cisco emerge as a leader in the server industry.

We were looking at what else was happening in the industry, and we made a transition into software-defined networking (SDN). We founded our fourth startup that would later be acquired by Cisco, Insieme Networks, where I served as CEO and developed software-defined networking tech that disrupted the traditional router/switch business. Starting with Crescendo and onwards, all these startups were eventually acquired by Cisco for over 2 billion dollars. Our MPLS team left Cisco in 2016, thinking of retiring. But then we got together and we thought there was still more we could do. Thus, Pensando was born.

Can you tell our readers what it is about the work you’re doing that’s disruptive?

At Pensando, we’re disrupting the balance of power in the cloud industry by giving enterprises and public cloud providers access to the same technologies that have helped make Amazon AWS so successful. Enterprises can get cloud-like capabilities in their existing environments without having to leverage the cloud or risk lock-in with any particular cloud vendor. Cloud providers can use the same technology to not just compete with but beat AWS. The Pensando’s platform makes it easy to transform legacy architectures into the environments needed for next-generation applications, regardless of whether they are hosted in the data center, the cloud, or a hybrid environment.

In that sense, we are democratizing the cloud, giving every business the technology they need to deliver next-gen applications without having to worry about managing complexity or vendor lock-in. In addition, Pensando’s software-defined services are making emerging tech like 5G and IoT possible by delivering networking, security, and storage wherever data is located. As edge computing increases in prevalence and necessity, our platform will be there to power it.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

When we launched our first startup, David Systems, we were very good at the technology aspect. We had one of the best teams in the Silicon Valley, including some of the people that went on to help build Pensando. Our product focused on integrating PBX technology (voice) with LAN technology (data). We were convinced that we had created a compelling product, but there was just one big problem. No one wanted it! The market wasn’t ready for it. We didn’t realize until we started selling that our customers weren’t ready to integrate voice and data simultaneously into one product.

I learned two important lessons. First, a product can’t be too early for its time, no matter its transformative potential. If organizations aren’t ready to adopt it, it makes little difference how great the product is. Second, I learned how crucial it is to talk to customers first and collect their feedback before introducing the technology. It was wrong to make any assumptions about what our customers actually wanted. By receiving customer feedback, we’re given healthy doses of reality that help us form a product that’s both transformational and ready to go to market.

We all need a little help along the journey. Who have been some of your mentors? Can you share a story about how they made an impact?

Mario Mazzola, part of the MPLS team, has made a big impact on my development since I started working with him in 1983. I’ve been privileged to work alongside him through various previous startups, and I count it a blessing that he’s still providing guidance to me from his role as Vice Chairman of the Board at Pensando. I’ve learned quite a lot from him from a technology and business perspective. One of my favorite words of advice from him is that “technology isn’t divine. It doesn’t age well.” I think that when we create a disruptive product, it’s so important to remember that it doesn’t stay disruptive on its own. It needs continual improvement, and we should always strive for better. He also taught me to be very thorough in everything that I do, especially after learning my lesson from David Systems. I’ve learned to look at everything through different angles with levels of analysis to deliver the best technology possible.

The other person I’ve learned quite a lot from is John Chambers, especially from a business perspective. Like Mario, I feel lucky that I still have John’s guidance to this day, as he holds the position of Chairman of the Board of Pensando. He’s shared his wisdom on how to scale, how to develop chemistry in an organization, and many other lessons that have really helped when it comes to building a successful business beyond the technological aspect of the product.

I’ve also learned a healthy outlook on failure from John. He always used to say, “You make mistakes. Accept the mistakes. Correct them and move forward.” He would use the analogy of a race. During that race, you will fall down and face some obstacles. But when you fall, get up and start running again. I love this advice because it acknowledges our humanity — that no matter how smart and successful we are, we are still human at the end of the day. Humans make mistakes, and that’s okay. When we can acknowledge that fact, we are relieved from great pressure and are free to turn failure into lessons. That mentality also helps me stay present. I can’t change the past, but I can look forward and do everything I can to make sure I don’t make the same mistakes again.

In today’s parlance, being disruptive is usually a positive adjective. But is disrupting always good? When do we say the converse, that a system or structure has ‘withstood the test of time’? Can you articulate to our readers when disrupting an industry is positive, and when disrupting an industry is ‘not so positive’? Can you share some examples of what you mean?

Disruptive’ has been used in the industry whenever there is a paradigm shift. You used to do things one way, but now you’ve found a way to do it better. But disruption carries a bit of nuance because not everything that we call disruptive is always a positive thing, or even should qualify as disruptive.

First, a disruptive product needs to provide substantial advantages of an order of magnitude. For example, lots of people tried to disrupt the phone industry by developing a smartphone, but many of them failed. Today, we know that the clear winner was Apple, who has made the iPhone ubiquitous. They succeeded in creating a truly disruptive product because they didn’t just create an intelligent phone, but one that was also easy to use. You don’t have to read a manual when you use an iPhone; it’s something that a two-year-old could pick up and use. That’s the kind of disruption we needed at the time — something that was technologically powerful and simple enough to be adopted into our daily lives.

Second, a disruptive product needs to foster a paradigm shift in a smooth and seamless way. People sometimes use the term “revolutionary” and “disruptive” interchangeably, but in fact, they are quite different things when it comes to technology. A disruptive product isn’t revolutionary, because revolutions take time. Revolutionary technology, such as quantum computing, isn’t something that’s going to be adopted right away. But disruptive technology is something that can be inserted into the market in a timely manner that helps people today. And once that disruptive technology is introduced, received, and adopted, it’s important to continuously innovate so that your product doesn’t go from innovative to old news.

Can you share 3 of the best words of advice you’ve gotten along your journey? Please give a story or example for each.

  1. Listen to your customers: It’s surprising how often we try to push ahead according to our own agenda, and then push that agenda to our customers. But it really should be the other way around. When you listen to your customers, you find valuable insights that you wouldn’t be able to unlock on your own. The problem is, we aren’t always listening. Customers will tell you things in a very subtle way, not with direct feedback but how they are or aren’t using the product. If you’re able to pick up on those things, and if you make a conscious choice to listen in that manner, you’re much more likely to deliver a product that fully satisfies your customer.
  2. Be honest: “Honesty is the best policy” can sound cliche, but I’ve found that applying that rule to every situation really is the best policy. If you made a mistake, don’t lie about it. Instead, acknowledge the mistake and work on fixing the problem as soon as possible. When you adopt an honest and transparent stance with your customers and partners, you build a reputation of trust that can last a lifetime.
  3. Be frugal in the right ways: When you spend money as a business leader, you have to treat it like your own money. To be highly productive, you have to be frugal. At the same time, you have to spend money to make money, which means that frugality has limits. For example, during a pandemic like the one we’re experiencing, it’s crucial that startups cut spending and preserve cash. But you shouldn’t squeeze your key suppliers by renegotiating contracts. By sticking to your word, you build loyal relationships that will outlast the pandemic. Instead, startups can do things like freeze hiring to make sure the company maintains a frugal approach that also maintains important business relationships.

We are sure you aren’t done. How are you going to shake things up next?

At Pensando, we’re very proud of our progress after completing what is now our fourth year of product development. We’re working closely with our customers in cloud and enterprise to continuously deliver on our promises and exceed expectations. As part of this, we are always looking at the next innovation and what we could bring in. I’m constantly thinking about how we can better help our customers build a next-generation cloud and adapt to a technological environment that is rapidly shifting. For example, the onset of the pandemic has brought new implications for a remote workforce that will demand new disruptive technologies. We’re eager to help enterprises adapt to this shift, and help them operate their applications in the environment of their choice, whether on their own private cloud, hybrid cloud, or a public cloud model, in a way that is simplified, automated, and easy to deploy.

Do you have a book, podcast, or talk that’s had a deep impact on your thinking? Can you share a story with us? Can you explain why it was so resonant with you?

I really admire Steve Jobs for the innovation he brought to the tech industry. I would listen to his speeches, talks, and interviews, and it really had a big impact from a business and tech perspective about what it means to build a culture of innovation. I remember toward the end of his life, he gave a talk about how life is full of transitions, and that while it might be easier to see all the things you should’ve done once you’ve reached the end of your life, it’s not always so clear cut during the journey. For me, it was a good reminder to give myself grace and apply that same grace to everyone I meet.

Bill Gates is another tech giant who I’ve always followed and admired. As he transitioned from his tech roles into a more humanitarian approach through his foundation, I have even more respect for him now and follow his work in healthcare. I really appreciate how he’s focused on making an impact that helps the common person, and I always find him insightful.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

I frequently tell people that once you become very successful, don’t consider yourself a star in the sky. Always stay on the ground. To me, that’s very important because a lot of people think that once they are successful, then that gives them a higher status than everyone else. But that’s a distortion of reality and an arrogant way of thinking. Everyone has their own journey, and there are a number of factors that contribute to any one person’s success. Not everyone has the opportunity to reach certain levels of success, and you were certainly helped many times along the journey by other people. It’s never only about you.

In my personal journey, I always try to stay on the ground. Instead of bragging about past success, I realize that everyone has a different story that is equally as valuable as mine. I think this perspective has kept me in the right state of mind throughout my career, and has helped me treat people with respect, regardless of their status or position.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

Throughout my whole life, starting in childhood, I’ve greatly admired Mahatma Gandhi. I strongly follow his principles of nonviolence, which we call “Ahimsa.” It’s not just physical violence, but the kind of violence that occurs in your thoughts and in your mind, which inevitably translates to how you interact with the world around you. Every year, I celebrate his birthday as a reminder of his way of life.

In my life, I hope to carry on the mission of nonviolence that we’ve also seen in the lives of people like Martin Luther King Jr., Cesar Chavez, and Nelson Mandela. I’m part of this group called the Ahimsa Center at the California State Polytechnic University of Pomona. We have a program there where we are instructing teachers, regardless of their subject, on how to teach in a nonviolent fashion. I hope that this can help make the world a more peaceful place.

I also aim to help the younger generation of entrepreneurs and would love to see them accomplish even greater things than I’ve seen in my life. I try to give my time by mentoring those that are starting their journey or are somewhere along their path. I’m very proud to have mentored Eric Yuan, the CEO of Zoom, who is really a remarkably bright leader. It’s very exciting to see the success he has had and I hope that I’m able to contribute in some small way to the next generation of disruptors.

How can our readers follow you online?

Please feel free to follow my social media accounts at the below links, and visit for the latest disruptive technology from Pensando.

This was very inspiring. Thank you so much for joining us!

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