Diane Greene Leaves VMware

By Scott Ferguson  |  Posted 2008-07-08

Diane Greene Leaves VMware

Diane Greene, who co-founded VMware and helped turn the company into the most influential of all the x86 virtualization vendors, is leaving her post as CEO and president and will be replaced by former Microsoft executive Paul Maritz.

VMware's board of directors announced the sudden shift in leadership in a July 8 statement. In the announcement, Joe Tucci, chairman of the VMware board and CEO of EMC, did not offer a specific reason for Greene's departure or what prompted the decision for her to leave now.

"As one of the founders and the leader of VMware, Diane guided the creation and development of a company that is changing the way that people think about computing," Tucci said in the statement. "The Board thanks her for her considerable contributions to VMware and wishes her every success in the future."

Greene's department comes less than a year after VMware went public in what some analysts called the most successful initial public offering in 2007 and among the most successful technology IPOs ever. While VMware offered about 10 percent of its shares to the public, EMC still controlled the vast majority of the company's stock.

Greene, along with her husband and several others, founded VMware in 1998, and the company turned itself into a driving force for bringing x86 virtualization into the marketplace as a way to consolidate servers within the data center. Virtualization has now become a mainstream technology among enterprises, and EMC originally bought the company in 2004 for about $600 million.

While VMware is controlled by EMC, VMware has kept its distance from its parent company, and its technologies and products have not been absorbed into EMC's portfolio.

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Since that IPO, the x86 virtualization field has become crowded with competitors, although VMware still maintains its lead both in terms of technology and the overall perception that the company's hypervisor technology remains superior. While rivals such as Citrix have started challenging VMware's dominance, the biggest challenge seems to have come from Microsoft with it recently announced Hyper-V for Windows Server 2008.

In an interview with eWEEK earlier this year, Greene sounded confident that VMware would not only hold its own, but would continue to thrive even as Microsoft, Citrix and a host of others entered the field. In the interview, Greene indicated that VMware would delve deeper into management features for its Virtual Infrastructure suite and offer additional capabilities, such as third-party security.

"We have been expecting Microsoft and all these other large [companies] to come into the virtualization space from the very beginning," Greene said at the time. "We have known for years that it would happen, and it's a validation of the market that now they are finally here."

With Microsoft now entering the market, it would seem logical to turn to a former Microsoft executive to take charge of VMware. Maritz worked at Microsoft for 14 years and helped with products such as Windows 95 and Windows NT before founding Pi Corp. in 2003.

EMC would later buy Pi, which focused on cloud computing, in 2008, and Maritz joined the storage giant as head of its Cloud Division in February. Maritz will now hold the title of CEO and president of VMware and sit on the company's board.

Although VMware's IPO had been successful and its revenues helped with EMC's bottom line, the company's stock price had fallen in the past year. VMware will announce its quarterly numbers on July 22, and its 2008 revenues are expected to be below the 50 percent it recorded in 2007.


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