Shakeup at VMWare; Shakeout Next?

Diane Greene, who co-founded virtualization darling VMware (NYSE: VMW) in 1998 with husband Mendel Rosenblum and led its successful IPO, has left the company in an abrupt departure that has the industry abuzz.

The news was announced by the company’s board of directors today and carried all markings of a CEO who appeared to be pushed out by VMware’s parent company, EMC (NYSE: EMC).

In announcing that it had “made a change in leadership” with the departure of Greene as president and CEO, VMware’s board announced that Paul Maritz, a former Microsoft executive and underling of CEO Steve Ballmer, would take over as new president and CEO.

The company also said that revenues for the full year of 2008 would be “modestly below the previous guidance of 50 percent growth over 2007.”

News of Greene’s abrupt departure, along with the vague earnings warning, sent shares of VMware tumbling by more than 27 percent to $38.65 during regular trading today. Shares of EMC fell by more than 10 percent to $13.59.

Joe Tucci, chairman of EMC and of VMware’s board of directors, thanked Greene in a statement, saying she “guided the creation and development of a company that is changing the way that people think about computing.” The statement then turned to praise for her successor, calling Maritz a “leader in the software industry.

“He has decades of experience building one of the greatest franchises in software history, Windows,” Tucci’s statement said. “Paul was instrumental as part of the core executive leadership team in building much of Microsoft’s success.”

During his 14-year tenure at Microsoft, Maritz worked on Windows 95, Windows NT, Database, Tools and Applications. He left to found a cloud computing start-up,
Pi, which EMC acquired in February 2008. He then became president of EMC’s cloud division.

Clash of cultures?

Greene’s departure had the industry buzzing today over her management style, strategy differences with EMC, and what the new leadership means for the virtualization sector in general.

Greene was constantly at loggerheads with EMC, which bought her company for $635 million in 2004. This was because of her protectiveness towards the company she and co-founder Mendel Rosenblum, her husband and VMware’s chief scientist, had built.

“Diane has very strongly maintained VMware’s almost complete independence from EMC, which is totally unique in EMC acquisitions,” Illuminata analyst Gordon Haff told InternetNews.com. “I strongly suspect that a factor here was the degree of independence that VMware could enjoy.”

A spokesperson for VMWare declined comment and EMC was not immediately available for comment beyond the company press release.

This article was first published on InternetNews.com. To read the full article, click here.

RELATED NEWS AND ANALYSIS

• Ethics and Artificial Intelligence: Driving Greater Equality

  FEATURE |  By James Maguire,
  December 16, 2020

• AI vs. Machine Learning vs. Deep Learning

  FEATURE |  By Cynthia Harvey,
  December 11, 2020

• Huawei’s AI Update: Things Are Moving Faster Than We Think

  FEATURE |  By Rob Enderle,
  December 04, 2020

• Keeping Machine Learning Algorithms Honest in the ‘Ethics-First’ Era

  ARTIFICIAL INTELLIGENCE |  By Guest Author,
  November 18, 2020

• Key Trends in Chatbots and RPA

  FEATURE |  By Guest Author,
  November 10, 2020

• Top 10 AIOps Companies

  FEATURE |  By Samuel Greengard,
  November 05, 2020

• What is Text Analysis?

  ARTIFICIAL INTELLIGENCE |  By Guest Author,
  November 02, 2020

• How Intel’s Work With Autonomous Cars Could Redefine General Purpose AI

  ARTIFICIAL INTELLIGENCE |  By Rob Enderle,
  October 29, 2020

• Dell Technologies World: Weaving Together Human And Machine Interaction For AI And Robotics

  ARTIFICIAL INTELLIGENCE |  By Rob Enderle,
  October 23, 2020

• The Super Moderator, or How IBM Project Debater Could Save Social Media

  FEATURE |  By Rob Enderle,
  October 16, 2020

• Top 10 Chatbot Platforms

  FEATURE |  By Cynthia Harvey,
  October 07, 2020

• Finding a Career Path in AI

  ARTIFICIAL INTELLIGENCE |  By Guest Author,
  October 05, 2020

• CIOs Discuss the Promise of AI and Data Science

  FEATURE |  By Guest Author,
  September 25, 2020

• Microsoft Is Building An AI Product That Could Predict The Future

  FEATURE |  By Rob Enderle,
  September 25, 2020

• Top 10 Machine Learning Companies 2021

  FEATURE |  By Cynthia Harvey,
  September 22, 2020

• NVIDIA and ARM: Massively Changing The AI Landscape

  ARTIFICIAL INTELLIGENCE |  By Rob Enderle,
  September 18, 2020

• Continuous Intelligence: Expert Discussion [Video and Podcast]

  ARTIFICIAL INTELLIGENCE |  By James Maguire,
  September 14, 2020

• Artificial Intelligence: Governance and Ethics [Video]

  ARTIFICIAL INTELLIGENCE |  By James Maguire,
  September 13, 2020

• IBM Watson At The US Open: Showcasing The Power Of A Mature Enterprise-Class AI

  FEATURE |  By Rob Enderle,
  September 11, 2020

• Artificial Intelligence: Perception vs. Reality

  FEATURE |  By James Maguire,
  September 09, 2020