VMware takes an executive talent hit but can handle it

Three executive departures in less than a month is a tough situation, but Pat Gelsinger is leaving VMware with a deep management bench.

pat gelsinger
Zeus Kerravala

The news that Pat Gelsinger is departing as CEO of VMware to take over at Intel generated a positive response for Intel and an equally negative response for VMware. Intel's stock jumped 7% on the day of the news, while VMware's stock fell 7%, and investment bank Piper Sandler slashed its VMware price target from $178 down to $157.

Most of the discussion has been around Gelsinger and his return to Intel. VMware, meanwhile, has been overlooked in the process. So what's the outlook for VMware, which has lost more talent than just its CEO in recent months? 

Gelsinger's departure is coming at a tumultuous time for the company. In December, COO Rajiv Ramaswami departed to take the CEO position at Nutanix, VMware's chief rival in the hyperconverged infrastructure (HCI) market. That resulted in a lawsuit from VMware for breach of contract.

Then just weeks ago, Ajay Singh, senior vice president and general manager of VMware's Cloud Management business unit, departed the company to become chief product officer for Pure Storage. No lawsuit as yet.

Executive churn isn't normally cause for concern unless it's a major one (like Steve Jobs' death) or if it's a pattern. Gelsinger, Ramaswami, and Singh are three heavy hitters in a row, all departing within a month. So is it really all that bad for VMware?

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