In a move that appears to be the end to a rather significant power struggle at the top of VMware, co-founder, CEO and President Diane Greene has been ousted in favor of former Microsoft executive and current EMC executive Paul Maritz. There hasn’t been a lot of detail released by VMware as to the reasons behind the move, but all signs point to a power struggle atop the virtualization behemoth and EMC subsidiary. Greene seems to have wanted to maintain significant independence from parent company EMC; Maritz seems to have no problems playing nice with the corporate parent.
VMware is facing significant competition in the virtualization space, both from Microsoft’s Hyper-V (released for download last week, BTW) and Citrix’s Xen Server. That being said, the real competition isn’t in the hypervisor space anymore, or it won’t be in the next generation of the products. The hypervisor is basically a commodity now, meaning that the other tools surrounding the virtualization platform is where the money is going to be made. It is hard to say if VMware is really adjusting to that quickly enough right now, but that’s mostly because they are in the lead so there isn’t a ton they can be doing right now to improve those tools. Microsoft is making their management tools integrate with VMware’s which is relatively easy, since VMware’s are out there and a known target. For VMware to make their fully integrate with Hyper-V right now is a bit harder since the platform is brand new. I’m reasonably confident that VMware will get the integrated management tools out there eventually.
Maritz’s background includes overseeing the development of Windows 95 and Windows NT, and most recently acting as the head of EMC’s Cloud Division. I don’t know if this move is a pre-cursor to melding the VMware line into the Cloud Division, but if it is I can see a couple potential synergies a few years out. While the mainstream is finally starting to accept virtualization as a hardware consolidation tool, there are more developments coming in terms of client provisioning and virtualization. And if you’re connected via broadband all the time and need to keep your session consistent and active everywhere, what better place to locate your access server infrastructure than in the “cloud” where it is the same setup from any connection, without being reduced to the lesser functionality of web-based clients. It would be an interesting move and potentially could create a schism in the virtualization field, with server virtualization and client-access virtualization forming two distinct tracks rather than the current overlap. Of course, the current overlap really resembles the client virtualization folks forcing their systems onto the server virtualization infrastructure, so maybe a split would be good for both sides.
Another possibility is that the VMware in the “cloud” is a move to an environment where the solution can become a service, rather than a product. I’ve worked with a vendor who is already renting server space in a virtual infrastructure, effectively charging for the services based on a formula that accounts for bandwidth, storage and CPU cycles while providing infrastructure to run most OS platforms. It is a pretty functional approach and seems to be working well so far. If VMware is looking to break in to that market this would be an interesting way to get there.
There still aren’t a ton of details out there as to the exact reasons behind the move, but it is effective as of June 30th, so there was no hiding the fact that this was a push rather than Greene deciding to “spend more time with her family.” In the mean time, the VMware platform is still the gold standard for hardware virtualization, and they are making pretty good progress on the other fronts. They reduced guidance on their earnings outlook, so that isn’t a good thing for investors, but it doesn’t change the status of the platform all that much.
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