Shakeup at VMware shows its lead is shrinking
By Robert Mullins
August 1, 2008 —
(Page 1 of 2)
Diane Greene’s dismissal as president and CEO of VMware was understandable for two reasons, notes an industry analyst: Greene was an engineer rather than a marketer, and competition in the virtualization market has intensified, slowing VMware’s once-rapid growth.
Greene had started VMware with her husband, Mendel Rosenblum, in 1998, run it as a division of EMC since 2003, and then guided its partial spinoff in an initial public offering in 2007. But she was fired on July 8. Paul Maritz, president of the cloud computing division of VMware’s parent, EMC, replaced her immediately.
Greene’s experience has been mimicked at other tech companies, noted Laura DiDio, a senior analyst at the Yankee Group. The companies are founded by engineers who have a brilliant idea for software or hardware. But when the company reaches a certain size or level of maturity, she said, it needs more than good product engineering to grow.
“You can’t argue with [her] success,” DiDio said of Greene. She and Rosenblum, whose engineering degrees are from MIT and Stanford University, respectively, took virtualization technology that IBM created on its mainframe computers decades earlier “and made it new again” for servers, desktops and other parts of the data center.
But other companies have built virtualization products that match VMware on quality but undercut it on price, DiDio added. VMware needs to become more marketing-focused, she added.
“Great marketing combined with so-so technology will get you further [and] faster than great technology with so-so marketing,” DiDio argued.
A number of developments occurred in virtualization that worked against VMware, she noted. Microsoft released its Hyper-V virtualization hypervisor to manufacturers on June 26. Given that about 70% of servers in the world run some version of Windows Server, Microsoft has an “in” with many potential customers.
In another case, Oracle’s acquisition of BEA earlier this year eliminated a crucial opportunity for VMware to pair its hypervisors with BEA’s middleware, DiDio noted. Oracle offered its own hypervisor at its Oracle Open World Conference in November 2007.
Related Search Term(s): cloud computing, virtualization, EMC, Microsoft, Oracle, VMware
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