Diane Greene’s Departure from VMware: The Week After

It’s been exactly a week since word got out that VMware co-founder and acting CEO Diane Greene was leaving the company to be replaced with former Microsoft executive Paul Maritz, who prior to the move headed EMC’s cloud computing division. Evidently, this event spurred tons of reactions worldwide, with lots of speculation, analysis and predictions for VMware’s future. Now that the dust has settled a little, here’s what we gathered from the past week:

Diane Greene most certainly did not get ousted only because of the disappointing financial results and prospects. While this may have played a role in the process, it’s a fact that Greene did not see eye to eye with EMC’s CEO and VMware chairman Joe Tucci in large part because of her determination to let the company sail a largely independent path. Rumor has it that she was pushing hard for the company to be spun off, and only a few hours before her departure was making headlines in the press and on blogs, EMC shares went up on rumors of a full spin-out of VMware to shareholders with minimal tax implications starting in early 2009.

Contrary to some speculation, Greene wasn’t against selling to EMC, but she was not always happy with the way its new owner tried to steer VMware’s course. It’s very likely that ousting Greene had been on the table for several months, and that it wasn’t prompted by a single event or market dynamics. The subsequent FORM 8-k eventually stated ‘Termination without cause’.

Greene gained a lot of respect both within the company (especially from the early employees and management team) and outside, helping VMware become the fastest growing software company this side of Google, with a killer IPO as a result, an impressive market share for its core business, and loads of technological innovation which seemed to set its competitors back with every new product release. But the question remains: did Diane Greene really have what it takes to stay at the helm with competitors like Microsoft and Citrix slowly switching to full gear, while small startups started to eat away at the company’s market share with small, but nasty bites?

We believe the switch may not be such a bad thing for the company after all. Maritz is a smart, ruthless manager and he knows how to play the game. He also carries a lot of insider knowledge from his days at Microsoft (and EMC), and we believe he might be able to turn the company’s slipping revenue streams around and grow the company into a position where its competitors can’t simply crush it under their weight. Unlike some, we’re bullish on VMware’s prospects, particularly on the enterprise market. If it will play a large role in making virtualization a hot topic for SMB’s as well, remains to be seen.

Meanwhile, its stock is trading at 40.50, recovering slowly after taking a big hit following the news of Greene leaving and a slightly lower revenue forecast.

On a sidenote, we consider it a shame that with Greene’s departure, the number of female CEO’s at Silicon Valley’s 150 biggest corporations is now down to zero. However, it was already a shame there was only one before she left.

Also, we’re still wondering if Mendel Rosenblum, chief scientist at VMware, one of its 5 co-founders and husband to Diane Greene, will remain in his position at the company for much longer.

Don’t hesitate to post your thought on the above in the comments!

About the author

I'm a blogger, entrepreneur, conference organizer, social media consultant, startup advisor and allround web addict, based in Belgium, Europe. I'm a writer at TechCrunch and managing editor of Virtualization.com.

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