VMware's CEO switch targeted at Microsoft, analysts say

New VMware CEO Paul Maritz will battle old friends at Microsoft

In tapping a former Microsoft executive to lead VMware's battle against the Redmond giant, VMware's EMC-controlled board of directors decided co-founder Diane Greene lacked the business savvy to win a struggle for market share, analysts say.

Greene, who was replaced as CEO by former Windows guru Paul Maritz on July 8, built the company from scratch since its founding in 1998, but VMware faces a very different set of challenges today than it did five or 10 years ago. VMware's Greene-led challenge early in life was to convince enterprises that virtualizing x86 servers could be done without compromising security and reliability or introducing bigger problems than exist in data centers that use physical servers only.

But after coasting through its first years without competition, VMware is being forced to justify its pricy products in the face of rival vendors such as Citrix and, of course, Microsoft.

It's the "classic innovator's dilemma," says Avian Securities analyst Jeffrey Gaggin. "She's an engineer, she's not a seasoned and savvy CEO type." Greene's husband and co-founder, Mendel Rosenblum, will apparently stay on as chief scientist. Rosenblum and Greene declined an interview request.

Even with Maritz, it might be difficult to fight off Microsoft. Nine out of 10 guest operating systems that run on VMware are Windows servers, notes Burton Group analyst Richard Jones.

If an enterprise is running Windows already, why not use Microsoft's new virtualization software, Hyper-V?

"It's hard to say if [Greene] would have done any better of a job than Paul Maritz," Gaggin says. "I think it's going to be tough for them to fight off the Microsoft threat. ... VMware is a single-product company trying to compete with a giant in their backyard, because the operating system environment is Microsoft's bread and butter."

Greene's ouster could signal changes, such as VMware making an acquisition to bolster its virtualization technology. Or VMware's own ownership situation could change, Gaggin says.

There had been rumors this year that EMC, which owns 86 per cent of VMware, would sell the company. Gaggin raises another possibility. EMC, which spun off part of the company in an IPO last year, could take those shares off the market and regain 100 per cent control. That's just speculation, though, he notes.

Maritz comes to the CEO position from a job as EMC's cloud computing president, a role he obtained after EMC acquired storage vendor Pi Corporation earlier this year. He left Microsoft in 2000 after 14 years managing development and marketing of products including Windows. EMC CEO Joe Tucci cited Maritz's experience with Windows in explaining the decision to promote him to Greene's former position.

While Greene was a "great pioneer," Maritz is a "hardened executive" with a long history managing successful products in competitive environments, says Gartner analyst Thomas Bittman.

"If Microsoft is their number one competitor, and they are, it would be good to have somebody who understands Microsoft in that role," he says.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jon Brodkin

Network World
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?