VMworld Timing Makes Latest VMware Resignation Sting

Richard Sarwal, VMware’s executive vice president of research and development, resigned his VMware post Sept. 2 and announced he is headed back to Oracle, from whence he came just nine months ago.

VMware said Stephen Herrod, the company’s CTO and senior vice president of R&D, will “assume day-to-day responsibilities for VMware’s research and development organization,” but made no mention of a permanent replacement. Herrod has been with VMware since 2001.

Sarwal’s resignation, announced on the eve of VMware’s most prominent annual event, VMworld 2008, Sept. 15-18 in Las Vegas, is just the latest installment of bad news for the company that was riding high during last year’s VMworld.

Good Times

VMware was riding high this time last year, and the EMC subsidiary was hardly a stepchild.

“VMware’s initial public offering of shares, Aug. 15, 2007, raked in nearly $1 billion, drove shares from $29 at the opening to more than $55 and was the largest technology IPO since Google raised $1.2 billion in 2004.VMware’s impressive growth put a crunch on IT talent in Silicon Valley.VMware founder and CEO Diane Greene was the toast of Silicon Valley.Our own Scott Ferguson reported after a March visit that VMware seemed ascendant and promoted few signs that it was anyone’s subsidiary.“

Bad Times

This year is different, and VMware’s guarded sovereignty within the EMC organization seems to be slipping as the parent company asserts more control.

“VMware’s stock has dropped 55 percent of its value in 2008. It was as low as $33 and hovers daily in the mid to high $30s.VMware’s second-quarter results missed targets and disappointed Wall Street for the first time.VMware CEO Diane Greene “resigned” in July, but the back story reveals she was pushed out after EMC CEO Joe Tucci asked her to hand over the CEO role. Paul Maritz, an EMC star, now heads VMware.Microsoft, Citrix, Novell, Red Hat and Oracle began to release rivals to VMware’s core product – the hypervisor – and appear hell bent on giving it away for free.“

None of this has hurt interest in VMworld 2008, VMware claims. VMworld 2007, in San Francisco, drew 10,800 attendees, and VMware reports that it expects more than 14,000 this year in Las Vegas. VMware was unable to provide figures on confirmed attendees.