Diane Greene Ousted from VMware

July 8th, 2008 by Julia Lim

VMware and EMC announced today that co-founder Diane Greene is leaving her post as CEO of the virtualization giant, effectively immediately. Former Microsoft executive, Paul Maritz, head of EMC’s cloud computing division, will replace her. (img credit Fortune Magazine/Joe Pugliese)

There’s speculation that falling VMware share prices, with no end in sight because of “poor revenue outlook” is the reason for the ouster.

Hmm. The stock went public at $29, went as high as $125 and is now at $40.26 (and falling as I write), almost a 40% premium over the first offering. Say what you will about the recently launched Microsoft Hyper-V and the Citrix offering that we never hear about, but VMware is the dominant virtualization player (and likely to remain so for at least some time given Microsoft’s track record with new product releases) in an exploding market. Gartner predictions are that the installed base of VMs will grow more than 10x between 2007 and 2011 and that by 2012 the majority of x86 server workloads will be running in a VM.

The future still looks pretty rosy for VMware – perhaps they’ll be taking a smaller chunk of the pie, but the pie’s getting much bigger. And all indications pointed to VMware moving up the stack and providing more management solutions (and more revenue streams) for the x86 virtualization market they helped to build.

So why the change? And why now? Is it a coincidence that it’s an ex-Microsoft exec taking over just as Hyper-V ships? Can only someone who knows the Microsoft Way combat the Microsoft Way? Remember this is the guy who wrote that Microsoft should “cut off Netscape’s air supply”.

So, good idea to say that Microsoft execs are better than VMware execs just as the Hyper-V juggernaut gets rolling? If I didn’t know better, I’d say this is the latest example of a MS FUD campaign…

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July 8th, 2008