EMC Puts Microsoft Exec In VMware CEO Seat

News from Microsoft WPC, Houston, TX: What happens when your over inflated stock price of $120 per share dips down to 1/3rd its value (and still might be over inflated)? The CEO gets the "you have a very bright future ahead of you, just not at this company" speech. Such is what's happened to Diane Greene, now former CEO of VMware. CEO jobs are great when revenue and profitability are great, but tend to suck a lot more when people are losing money in what looks like an unending stock price slide. Diane Greene's been in the press a lot lately too defending how VMware will fend off Microsoft, Citrix and a host of other virtualization would-be titans. Not every founder is cut out to take the company through it's many growth phases and cycles. So many have proclaimed that VMware has the virtualization market sown up but both the stock price drop and this CEO ouster say otherwise. I'm sure Microsoft, Citrix, Parallels, Virtual Iron, Oracle, Sun Microsytems and many others would agree.

But the plot thickens. Who's Diane's replacement? Paul Maritz, former Microsoft, Pi and EMC exec. That VMware CEO seat's too important to the stock price to let that seat cool down much. Clearly EMC likely played their shareholder card in getting Martiz in as the CEO. But besides keeping the CEO's seat filled, what else does the Martiz assignment say to the market?

My read is that VMware was struggling to scale to really become the dominant software company their $120 stock price said they should be. We all have our limitations and Green likely took VMware as far as she could, making a lot of people cartloads of money along the way. Now they need someone else to bring VMware back to the prominence it once it enjoyed. This also says that VMware board members figured, if you want to be a dominant software company, go hire a CEO who knows what it takes to be one. Is that what Marizt brings? His resume says so but with momentum building on the Hyper-V, Xen, and other fronts, it's not a sure thing that VMware can stop the slide toward "used to be dominant VMware". More importantly, does Maritz have what it takes to get the stock price back to $120 and beyond? We'll see - that's what the VMware board is certainly betting.

Paul Martiz, you have an open invitation to appear on the Converging On Microsoft to talk to us about your new plans for VMware.

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