July 9, 2008 4:14 PM
VMware parts company with CEO
by Tom Jowitt
The IT industry can at times be a pretty brutal place. No more so than in the complex atmosphere of IT management hiring and firings.
The news of the removal of co-founder and CEO Diane Greene by VMware's board is just one such example. On the face of it, it seems a strange decision for a person who has managed to transform VMware from small startup to a dominant position in the virtualisation market.
VMware didn't exactly say why Greene was being replaced, although the wording in its statement suggested that it was the board's decision and not her own. The company is due to report its financial results in a couple of weeks time, but in an update, it has revealed that its year-on-year revenue growth for 2008 will be "modestly below" its previous estimate of 50 percent.
Was the board seeking to offload as much negative news at once? Well, the markets weren't happy and almost a quarter of VMware's share value was wiped off its shares upon the news.
So why did she go? Well, some rumours hint that she didn't get along very well with VMware's owner, notably the CEO of EMC, Joe Tucci. EMC as we know, retains a 86 percent stake in the company. Tucci was reportedly keen to get someone with greater operational experience to head up the company.
Certainly, there usually does come a time in the life of a startup when the founder has to, or is forced to, step aside and let a more experienced person take the helm, in order to take the company to the next level. But VMware is enjoying at least a 82 percent market share, which suggests that Greene was not doing a lot wrong, despite her 'lack of operational experience'.
Could it be that the release of Microsoft's Hyper-V triggered the board's move? Certainly, the appearance of Redmond's tanks on your front lawn is always going to cause a certain amount of trepidation, no matter who you are. Yet Microsoft's move had been widely expected and the consensus seems to be that Microsoft will take a number of years to get up to speed in the virtualisation market. Mind you, Netscape most probably thought the same thing.
Diane Greene's replacement is Paul Maritz, who in an ironical twist of fate, is a former Microsoft man, reportedly at one time the number three man at Redmond behind Bill Gates and Steve Ballmer.
Incidentally, there is no word on Greene's husband, Dr Mendel Rosenblum, who is also co-founder of VMware and its chief scientist. How will he react to the departure of his wife? Oh, to be a fly on the wall at their dinner table if he opts to stay.
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