In the post-Diane Greene era, the possibilities for VMware seem endless, and speculation ranges from EMC working to integrate more VMware virtualization technology into its portfolio to EMC selling VMware off in 2009 to the relationship between the two companies staying the same.
The next chapter in VMware's history is about to begin.
the departure of CEO and President Diane Greene,
the question now is where
VMware, which did more than any other company to bring x86 virtualization into
the mainstream, will go from here as a company without the leader so closely
associated with its success.
When the VMware board of directors announced Greene's departure July 8, speculation
began almost immediately
about whether it was VMware's falling stock price,
entrance of Microsoft and other vendors into a market
where VMware had a
stranglehold for a number of years, or a clash of personalities between Greene
and EMC executives that led to her exit.
However, the real question for the company's customers is: Where will VMware
and its technology go from here?
was the public face of VMware, and her approach to the role of CEO,
understated compared with those of other chief executives, offered VMware what
one analyst called a sense of credibility and belief in the company and its
technology as its relationship with EMC loomed in the background.
Now, that credibility is being put to a test.
A number of analysts predict that VMware's products, technology and road
maps will not change much in the coming months. However, Greene's
departure could mean a change in VMware's
relationship with parent company EMC.
When VMware announced its initial public offering in 2007, the company only
offered about 10 percent of its stock to the public, while EMC,
which bought VMware in 2004 for about $630 million, kept control of the
It was EMC CEO Joe Tucci, in his role as
VMware board chairman, who announced that Greene had left,
and it was
believed that Greene was the main force keeping VMware from being absorbed into
the EMC portfolio.
Now, with Greene gone, VMware could get pulled more into the EMC
storage product portfolio, and this allows EMC
to offer a number of features with its storage offerings that its competitors
can't. This also provides a way for EMC
to differentiate its products. These added features could include security,
virtual storage, archiving, compliance and disaster recovery.
"What I expect to see is EMC-slash-VMware
looking at ways VMware can differentially advantage EMC
storage gear," said Gordon Haff of Illuminata. "That's not to say
that VMware is going to yank NetApp from its list of certified storage vendors. What we may see is the conjunction between VMware and EMC hardware and software that offers products that you wouldn't see anywhere else."
What Haff and some other analysts agree on is that VMware and EMC
are likely to concentrate their efforts on the enterprise and concede some of
the midmarket and small and midsize business space to Microsoft and its Hyper-V
product as well as Citrix Systems with its Xen-based virtualization.
John Humphreys, an analyst with IDC, said
he is not convinced that EMC will absorb
VMware as it has with other acquisitions. The success of VMware, Humphreys
said, is the company's ability to work with a number of other OEMs such as
Hewlett-Packard and Dell.
Humphreys said he sees VMware's continued success as separate from EMC.
key to continued success is VMware driving innovations
such as VMotion,
which allows a user to move a virtual machine from one physical machine to
another, he suggested. This will distance its management suite from
what other companies such as Citrix and Microsoft can offer.
"They [VMware] have built their success on moving quickly, being
aggressive and innovating with technology that [has a great] impact and
directly solves business problems that the customers are facing today," Humphreys
said. "They need to continue [to] out-innovate everyone else ... What is the
next VMotion that is going to make them stand apart from everyone else?"
Another possibility is that VMware could move deeper into cloud computing.
Paul Maritz, Greene's replacement, previously worked at Microsoft and then
started a company called Pi that developed products for the cloud. Maritz was
made president of the EMC Cloud Division
after EMC bought Pi earlier in 2008.
Rachel Chalmers, an analyst with The 451 Group, said VMware plans to offer a
new suite of cloud computing at the next VMworld Conference and that Maritz's
expertise in this area could mean that EMC
was looking for someone new to take VMware in a different direction.
There is also a chance that EMC
could sell its stake in VMware
in 2009 to another company or spin off the
business as its own separate entity. While this possibility has been floated
since VMware's IPO in August 2007, EMC
has continued to deny
that it will sell off its share of the company.