Ex-Cisco CEO John Chambers, star team of engineers have a startup targeting Amazon’s AWS

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John Chambers and a legendary quartet of Cisco Systems Inc. employees responsible for Ethernet switching technology have re-teamed at a startup with AWS squarely in its sights.

Pensando Systems, the ultra-secretive Silicon Valley company announced Wednesday in New York it has developed hardware and software that lets companies run their computer servers more efficiently, particularly in the cloud.

It believes that as cloud-computing evolves into edge computing, a distributed scheme that brings key data closer to locations where it is needed, more corporations will need to run multiple applications on a single server. Its customized cloud service, which will accommodate superfast 5G networks, Internet of Things devices, and artificial intelligence, is an alternative to Amazon.com Inc.’s AMZN, +0.69%  AWS that is five to nine times faster. (AWS has its own hardware, called Nitro, for the same market.)

AWS was not immediately available for comment on Pensando’s claims.

Pensando has some big backers. Hewlett Packard Enterprise Co. HPE, -0.23%  and Lightspeed Venture Partners have led a Series C round to raise up to $145 million in funding, bringing its total amount raised to $278 million — and a market valuation of about $650 million. Among Pensando’s customers are Oracle Corp. ORCL, -1.07%  , NetApp Inc. NTAP, +0.11%  , and Goldman Sachs Group Inc. GS, +1.00%  

Advances in emerging technologies such as 5G, IoT, and AI are accelerating data growth and changing not just how it is consumed but where, Soni Jiandani, co-founder and chief business officer of Pensando, told MarketWatch in a phone interview.

Indeed, as much as 75% of enterprise data will be created and processed at the edge by 2025, creating significant challenges for existing computing infrastructures, according to market researcher Gartner.

The back-story of Pensando (Spanish for “thinking”) is as intriguing as its technology.

Chambers, who was chief executive of Cisco CSCO, +0.74%  until 2015 and is now leading a venture firm called JC2 Ventures, has been working with the four principals of Pensando — Jiandani, Mario Mazzola, Prem Jain, and Luca Cafiero — since the company formed in 2017. Chambers, who is chairman of the startup, acquired the talents of the foursome in 1993 when Cisco bought Crescendo Communications. Crescendo had developed Ethernet switching technology, which would became a core part of Cisco’s multibillion-dollar business

“I’ve worked with this team for 26 years, and we built eight technologies that led to billion-dollar markets,” Chambers told MarketWatch in a phone interview. “It’s fun to be reunited with my family.”