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Joe Tucci

Stand By Your Woman: Mendel Rosenblum Leaves VMware Too

September 9, 2008 by Robin Wauters 1 Comment

Reporting on the recent removal of Diane Greene as president, CEO and board member of VMware, we wrote:

“We’re wondering how the VMware troops will react on the news, and what will happen with Mendel Rosenblum, Chief Scientist at VMware and Greene’s husband.”

Now IHT / The New York Times has received confirmation that Rosenblum, co-founder and top executive at the company as well as husband to Greene, has resigned from his position (hat tip to Tarry). He announced his resignation and return to Stanford as a full-time professor in a companywide message on Monday night.

The NY Times also offers some insight about the removal of Greene:

On July 7, she found out just how cold it had become. After Greene made a special presentation to VMware’s board, Tucci, who heads VMware’s parent company, EMC, pulled her aside, according to people familiar with the events, who asked for anonymity because they were not authorized to discuss internal company decisions.

Inviting Mendel Rosenblum, Greene’s husband and the co-founder of VMware, into the room, Tucci told Greene she was fired, effective immediately. And he said the board wanted Rosenblum, VMware’s chief scientist, to take her seat on the board. Rosenblum declined the offer.

The news comes after the surprising move of Richard Sarwal, former executive VP of research and development at VMware, who returned to Oracle after a brief stint at the company. Another executive to jump ship is Paul Chan, Vice President of Product Development at VMware until recently.

Who’s next?

We’ll update the post should new information come to light.

Filed Under: Featured, News, People Tagged With: Diane Greene, Greene, industry moves, Joe Tucci, Joseph Tucci, Mendel Rosenblum, resignation, Rosenblum, virtualisation, virtualization, vmware

EMC Reports Strong Q2 Results, Might Spin Off VMware Anyway

July 24, 2008 by Robin Wauters 1 Comment

So VMware performed below expectations, but how did parent company EMC do the past quarter? Not too shabby, actually. In its Q2 Earnings conference call (see transcript here), the company outlined that it had performed well against the backdrop of a challenging economic environment, although its outlook for the future was less rosy.

In the second quarter, EMC had revenue growth of 18% (to $3.67 billion), a non-GAAP EPS growth of 20%. EMC’s second-quarter net income rose 13% to $377.5 million, or 18 cents per share, from $334.4 million, or 16 cents a share, a year earlier. EMC backed its January forecast of full-year profit of 78 cents per share, excluding items. It said 2008 revenue would exceed $15 billion, up from its previous outlook of $15 billion.

The results sent EMC shares up a few points, and they got a further boost when EMC opened the door to a VMware spinoff, per report by Reuters. EMC CEO Joe Tucci apparently stated in an interview with Reuters that a VMware spinoff is definitely possible, although it likely wouldn’t happen in 2008.

EMC Corporation

VMware

Filed Under: Featured, News, Rumors Tagged With: earnings call, EMC, Joe Tucci, Q2 earnings call, virtualisation, virtualization, vmware, VMware spinoff

Diane Greene’s Departure from VMware: The Week After

July 15, 2008 by Robin Wauters 1 Comment

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!

Filed Under: Featured Tagged With: Diane Greene, EMC, Joe Tucci, Paul Maritz, virtualisation, virtualization, vmware, VMware EMC

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