Management Turnover as Change Agent

Tuesday, July 8, 2008

VMware CEO Out, Former Microsoft Exec In

In a surprise announcement VMware VMW (NYSE), the company that creates and develops software designed to manage virtual machines, made public the immediate resignation of its co-founder and CEO, Diane Greene. The resignation comes in the wake of the company's latest announcement that its 2008 sales will be lower than earlier projections. In Greene's place, the company has selected Paul Moritz, a former Microsoft executive who retired from the firm in 2000 after fourteen high-profile years with the company. According to the Silicon Valley/San Jose Business Journal during his time with Microsoft,
Moritz managed the development and marketing of many of the company's major products, including Windows 95, Windows NT, Database, Tools and Applications.

In 2003 he founded Pi Corp., a startup software company focused on building Cloud-based solutions. Pi was acquired by EMC Corp. in February 2008.
In the company press release, VMware did not give a reason for the departure of Greene. VMware had been a high flying stock at the time of its initial IPO back in the summer of 2007. Even before the IPO, VMware was considered a star in the computer virtualization space. The company remains the leader in the field but has found itself lately in competition with a number of the biggest players including Microsoft, Oracle, Dell, Red Hat and many others. To make matters worse many companies have turned to open source software as a way to manage virtualization an approach that VWware has refused to take and has helped to place the firm at an even further potential disadvantage going forward.

Greene's departure may be due to lower sales, growing competition or the fact that the firm needs new executive blood for it to find a way to successfully compete and remain on top. VMware remains majority owned by EMC which very likely had a hand in today's management change.

This is definitely a company that should be watched closely as new management takes over.

For more:

ValleyWag (7/9)
Market Watch (later in day)

Giga Om

Market Watch
Barron's Blog
MSN Money

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