Reorganization: Greene out, Maritz in at VMware

Recent upheaval leaves industry bewildered.

The virtualization world was stunned last July 8 when Diane Greene, co-founder, president and CEO, was dismissed by VMware Inc. and replaced with industry veteran Paul Maritz.

The reasons for Greene's ouster haven't been made clear by the company, which announced the change in a press release that spoke much more about Maritz than Greene.

Greene and her husband, VMware Chief Scientist Dr. Mendel Rosenblum, founded VMware in 1998 along with three others. It started out as a small business barely on the radar, and has since grown into a software giant with revenues of approximately $1.5 billion. The departure of Greene marks the first significant management turnover at the company's highest levels.

There were a number of rumors of a strained relationship with Joe Tucci, president and CEO of parent company EMC Corp. It's believed that Greene kept VMware mostly separate from the corporate culture of EMC, fiercely maintaining an autonomy that rubbed Tucci the wrong way. The change, in the view of some, was Tucci's way of asserting control over VMware.

Diane Greene was recently removed from her position as CEO with VMware Inc. (which she co-founded) in a move that industry watchers says was EMC Corp. CEO Tucci's way of asserting control over the virtualization software giant.

Facing Challenges
Maritz steps into Greene's shoes at a time of significant challenges to the company's dominance in the virtualization market. It faces stiff competition for the first time with Microsoft's entry into the enterprise computing market. Hyper-V, Redmond's base hypervisor, is free with Windows Server 2008; a near-free standalone version, called Hyper-V Server, is coming later this year. In addition, companies like Citrix Systems Inc., Sun Microsystems Inc., Virtual Iron Software Inc., Novell, Hewlett-Packard Co., Oracle Corp. and others are building platform solutions and dumping lots of resources into their virtualization efforts.

VMware also faces a slow global economy and sluggish growth in its business, particularly in the area of enterprise license agreements; in late July, the company announced that it will fall well short of its previously stated prediction of 50 percent year-over-year growth, coming in at between 42 percent and 45 percent instead.

To help give his new company a shot in the arm, Maritz announced July 23 that it was making the lightweight version of ESX, called ESXi, a free product. That helps it compete on even footing with Hyper-V and Xen, the free, open source hypervisor used as the basis for many competing products.

Remaining Confident
Maritz, a 14-year veteran of Microsoft who was once a member of the leadership inner circle, hopes to use his knowledge of his former employer's ways to help fend off its attack.

"I know that Microsoft is a formidable, but not invincible, competitor," Maritz said during a recent conference call. He also pointed out that VMware has a substantial lead in not only hypervisor functionality, but in the overall infrastructure space. That lead, he said, "can be very hard to match, even for Microsoft. Hyper-V is new, and will take time to mature. [It doesn't] have a fleet of software anywhere akin to our [virtual infrastructure]."

Maritz is confident in VMware's ability to keep, and even extend, that lead. "The key is to innovate, invest, stay ahead and keep increasing value proposition. That's exactly what we intend to do."

About the Author

Keith Ward is the editor in chief of Virtualization & Cloud Review. Follow him on Twitter @VirtReviewKeith.