Ousted VMware CEO no concern to users

The abrupt ousting of VMware co-founder and CEO Diane Greene may have occurred through a plot worthy of Elizabethan treachery but analysts say there is no need for users to worry.

Greene was fired on Tuesday in a move the VMware board of directors claimed would "extend its lead in the virtualization market", and replaced with former Microsoft executive and EMC cloud computing president, Paul Maritz.

She is described by many as one of the greatest IT visionaries of the last 20 years, up there with Bill Gates and Oracle co-founder Larry Ellison, and has proven to be one of IT's most resolute and innovative leaders.

The terse press release issued by the company has aroused intense industry speculation that the removal of Greene was personal, not just business.

"The press release is indicative that she was pushed out [by EMC CEO Joe Tucci]," IBRS research director Kevin McIsaac said. "Diane was the heart and soul of VMware," he added.

"One might surmise that Tucci couldn't deal with Diane and pushed her aside. Does he know what he is doing by shoving her out of the company, given that Microsoft is entering [its Hyper-V virtualisation software]?"

EMC's share price has flattened out in recent years while VMware, which it bought in 2003, has enjoyed soaring growth as a darling of the industry since its IPO last year.

But some, including McIsaac, suggest Greene was tasked with maintaining VMware's unsustainable growth rates and was in part ousted when she failed to meet targets early this year.

EMC, led by Tucci, has the business acumen and resilience to weather the storm. It has successfully changed its spots three times over the last 15 years from a mainframe company to a high-end open systems vendor and again to adjust to the commoditification of storage.

Microsoft will present little threat with its nascent offering to VMware while it matures and irons-out product kinks, however McIsaac says we can only speculate as to how Maritz will use his 14 years at the budding rival to shape VMware's strategy.

"Maritz is new to the space, but it is unclear whether his knowledge of Microsoft is a good thing - he may be able to use his knowledge to compete better with them or he might be blinded by them," he said.

While McIsaac can't see the upside to the change of helm, he said it means very little to users in the short term.

Speaking of how Maritz will handle flattening VMware revenues as it's market dominance is challenged, McIsaac referred to the joke about the incoming CEO.

The story goes that the new CEO is given three letters by his ousted predecessor, and told to open them in times of crisis.

Six months later, share prices fall so the new leader opens the first letter which reads 'blame everything on your predecessor'. So he issues a press release denouncing the former director and disaster is averted.

The following six months brings more problems, so he reads the second letter which tells him to reorganise the company, and he promptly fires a lot of staff making shareholders happy again.

A year later analysts and press are still demanding his blood, so he opens the last letter and reads 'time to write out three letters'.

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