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Virtualization - VMware Suffers Meltdown

VMware CEO Replaced by Ex-Microsoft Biggie

There’s a little puddle on Wall Street where VMware, the virtualization leader and the most brilliant IPO since Google went public, used to be.

EMC, VMware’s parent company, announced mid-morning that VMware co-founder Diane Greene was out presumably because the company isn’t going to make its full-year 2008 guidance of 50% growth over 2007 and it hasn’t reported its second quarter yet. EMC said it would come in at “modestly below” its goal.

Exactly how “modestly” may start to become evident when VMware reports its second-quarter numbers on Tuesday, July 22.

The news cut the legs out from under VMware’s stock, costing it ~30% of its value as of yesterday and landing it in the high 30s, a price point it hasn’t seen since it IPO’d last summer.

In the weeks following its Wall Street debut it hit $125, but that was before visions of competitors like Microsoft started spooking investors.

Microsoft will be giving its Hyper-V technology away free with its Windows Server 2008 operating system. Hyper-V just came out a month or two early a couple of weeks ago. It is not as fully featured as VMware but its price is hard to beat for a Microsoft shop.

EMC, which continues to own about 85% of VMware, moved ex-Microsoft biggie Paul Maritz in to replace Greene.

Maritz, who used to be one of the three triumvirs who used to run Microsoft, was responsible for the development and marketing of Windows 95 and NT as well as the company’s database, tools and applications.

He left Microsoft in 2000 and a couple of years later started Pi Corporation, which EMC acquired in February.

EMC put Maritz in charge of a new Cloud Infrastructure and Service Division that it never fully explained. The unit included Fortress SaaS, EMC’s multi-tenant infrastructure, the company’s Mozy online backup service and some other mysterious infrastructure systems and software EMC was developing.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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