VMware Bombshell: The Day After

A roundup of analysis from VMware watchers on the departure of CEO Diane Greene, and what it means for rumors of a spinoff from EMC.

What's the real story behind the ouster of VMware CEO Diane Greene? The analysis from VMware watchers is focusing on two issues: whether VMware should be spun off or sold, and tensions between Greene and EMC chairman Joe Tucci. Here's a roundup:

  • Greene's exit is a "dramatic gesture" by EMC to silence talks off a spinoff, according to the New York Times.
  • Was a spinoff of VMware ever in the cards? Speculation of a spinoff boosted EMC's shares in May, and prompted at least one analyst to raise his rating on EMC. Most of the chatter has focused on Intel and Cisco, which each bought stakes in VMware prior to its IPO.
  • The Register focuses on the rumored tensions between Greene and Tucci. "It's nothing less than shocking that Tucci would push to remove Greene just as VMware needed her most," writes Ashlee Vance. "Here comes Microsoft with Hyper-V finally ready, and you're going to rattle the whole ship because of a personality conflict?"

  • How is Greene's dismissal playing inside VMware? Not well, according to Virtualization.info, which shares an insider account from a VMware employee. "A large number of VMware employees are not happy," the employee writes. "And it seems that soon people could start leaving in a mass exodus if they do not get straight answers from management. Having an ex-MS employee in a company full of engineers who are pro-FOSS (Free and Open Source Software) is just a bad idea and sends A LOT of the wrong messages."
  • The open source angle was also explored by Dana Blankenhorn at ZDNet and Sam Dean at OStatic, who notes that VMware's virtualization software is "increasingly being encroached on by open source offerings."

Here's one additional issue: What does the appointment of Paul Maritz to head VMware mean for EMC's cloud computing effort? When EMC acquired Pi in February, Maritz was appointed President and GM of EMC's new Cloud Infrastructure and Services Division. Will his departure for VMware just five months later be disruptive to EMC's emerging cloud offerings?