Analysis VMware boss Paul Maritz is rumoured to be exiting his virtualisation software powerhouse - and could be replaced by Pat Gelsinger, the head of storage products at parent company EMC.
You'd be forgiven for thinking this is a shock move, yet simple facts and observations from our sources point to this being a management tweak rather than a punishment for the VMware chief.
Maritz's speculated departure to the EMC board marks four years at the helm of the virtual machine-maker, which is recasting itself as a cloud infrastructure provider. Maritz was named VMware CEO in 2008 when EMC boss Joe Tucci fired then-chief exec Diane Greene.
VMware's rumoured new chief exec is Gelsinger, chief operating officer and president of EMC’s information infrastructure products. His portfolio includes storage and backup gear. VMware was unable to comment on the changes when contacted by The Reg.
Maritz, however, dismissed gossip of his replacement by Gelsinger as “speculation”, according to Bloomberg. Any changes are expected to be announced with the company’s second quarter results on 23 July.
Hang on… speculation?
Maritz and VMware may officially dismiss the details, as you’d expect, but change is certainly approaching for the virtualisation giant. El Reg's sources close to VMware have told us the company is indeed planning a strategy change and that there’s been a lot of internal talk of “fine-tuning things”.
“The company has been working on a certain strategy and there’s a lot of pressure on the business to maintain growth to maintain the high stock price,” one mole said.
The goal of the change is to grow into “other areas”, beyond virtualisation where the company remains the market leader. Maritz favours branching out into VMware’s three layers – cloud, apps and virtualisation, the latter being its bedrock technology that allows multiple instances of an operating system and software to run on one or more computers, effectively sharing the hardware resources between systems as required.
The change comes after a number of top execs left from parts of VMware responsible for its middleware and cloud work - as well as some engineering brains VMware had brought in with its purchase of SpringSource.
Gone are Spring Framework creator Rod Johnson, who headed open-source Java and middleware; Peter Cooper-Ellis, VP of engineering at the SpringSource division; Mark Brewer, who was VMware's veep for business operations for its Cloud Application Platform; and Shaun Connelly, the SpringSource product strategy vice-president.
Meanwhile, as Reg storage watcher Chris Mellor reports, changes are washing through EMC, VMware’s corporate parent. Top sales guys across Europe, the Americas, Asia Pacific and global customer accounts and OEMS have been shifted.
What’s behind the VMware changes?
VMware may be number-one in virtualisation, but there’s growing pressure from Microsoft. Also, the love it longs from developers has eluded VMware. This is despite efforts to exploit cloud computing, dabble with open source, own its own apps and middleware, and bring in ex-Microsofties such as Maritz and ex-MSDN chief Tod Nielsen.
Tucci fired Green in July 2008 when VMware’s stock price fell to $39.38 a share and the company missed its quarterly targets.
Four years in, and despite a double-dip recession that’s hit markets, VMware stock is back up to $84.41 while revenue grew 25 per cent year-on-year in its fiscal first quarter of 2012 to $1.06bn.
This recovery suggests the rumoured Maritz move is not a punishment, and more that this is the structure tweak that our sources are telling us is happening.
Diversification is needed by VMware. Competition is growing, notably from Microsoft with its free Hyper-V offering for Windows Server.
Last week Redmond bragged to partners about IDC research that said for the first time its Hyper-V had gained market share on x86 while VMware’s ESX lost share – Hyper-V was 26.6 percent, up from 22.5 percent in the year-ago quarter, while ESX fell to 52.4 percent from 53.6 percent a year earlier.
VMware has been successful in adding management capabilities to its vSphere and ESX products, and in positioning its virtualisation stack as a foundation for clouds. The company claims more than 125 “verified” vCloud public clouds in 26 countries.
But it’s the diversification that’s proving – and will continue to prove - to be EMC’s challenge, no matter whether Martiz remains at the top or Gelsinger takes over.
VMware bought SpringSource and Zimbra supposedly to build apps and middleware tuned to its virtualisation layer and win a greater share of developers’ new apps. The problem for VMware, is that developers don’t really see VMware as their kind of company – it’s still an infrastructure pitch for CIOs rather than a developer pick.
Meanwhile, sources tell The Reg of tension within the team running CloudFoundry, which was launched in April 2011 to provide an open-source platform-as-a-service (PaaS) for building apps in the cloud.
CloudFoundry chief Derek Collison left in February this year to run his own cloud startup, Apcera. The pressure seems to revolve around the desire to iterate and release services fast as opposed to working slowly to a products company that is VMware.
CloudFoundry supports Java, Scala and Node.js but it’s not the only PaaS offering out there: there’s Microsoft’s Azure, Red Hat’s OpenShift, and Heroku, plus the Amazon and OpenStack clouds as the infrastructure-as-a-Service (IaaS) layer. The challenge of any spin out will be differentiation against a crowed competitive field. GigaOM reports that VMware may spinout CloudFoundry and the big-data analytics company Greenplum it bought in 2010.
The framework of VMware's next chapter might be in place with cloud and also with apps. But, as our sources tell us, VMware has realised it must do more to stand out against a number of PaaS and IaaS rivals. ®