VMware Replaces CEO as Competition Grows

Posted by Scott Delap on Jul 08, 2008 01:35 PM

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Today to the surprise of industry analysts VMwware replaced long time CEO and company founder Diane Greene with Paul Maritz. Maritz worked at Microsoft for 14 years retiring in 2000. His recent company Pi Corporation (a startup focusing on cloud based solutions) was acquired by VMware parent company EMC in February. One clue to the reasoning for the change is the following from the press release:

...While VMware is not updating guidance for Q2, we expect revenues for the full year of 2008 will be modestly below the previous guidance of 50% growth over 2007...

GigaOM is reporting that the stock has plunged 30% as a result. They also speculate that Green's departure was more political than financial citing friction with bosses at EMC. The register takes a harder line:

By firing VMware chief Diane Greene, EMC's top dog Joe Tucci has sent a message to investors that his personal likes and dislikes come before their broader interests. That's not exactly what you want to see from an executive who has already done so very little for investors over the past five years...

Alternatively, ZDNet ponders whether open source products such as Xen and VirtualBox played a role as well. Finally and perhaps most important as Virtualization.info points out:

...It’s worth to highlight that the VMware’s Chief Scientist, Mendel Rosenblum, is also her husband. This replacement, if imposed by the parent company EMC, may have a huge domino effect on the whole VMware management team...

InfoQ will continue to follow any ripple effects from today's management changes at VMware. For more information about the virtualization marketplace visit our new virtualization topic and our recent article providing an overview of the industry.

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