VMware partners shocked at founder's exit

Virtualisation giant shuffles management after Diane Greene is ousted, but partners have questioned the move

Diane Greene: founded VMware in 1998

Resellers have questioned virtualisation giant VMware's decision to oust its founder and chief executive, Diane Greene, as the vendor anticipated a sharp slowdown in revenue growth.

Earnings for Q208 are scheduled for announcement on 22 July; however the vendor has admitted that its revenues for full-year 2008 will fall below the previous forecast of 50 per cent growth over 2007.

Shortly after the announcement of Greene's departure the vendor's stock dropped 24.2 per cent. VMware's board of directors has appointed Paul Maritz as president and chief executive effective immediately.

Alan Brown, business strategy director at VMware partner Panacea Services, said: "It is certainly a surprise that the decision has been taken to replace Diane Greene with Paul Maritz. From where we are standing the virtualisation market is booming. VMware did not look like a company in crisis."

The announcement comes as VMware faces heated competition from the likes of Microsoft, Oracleand Citrix.

Joe Tucci, chairman of VMware’s board of directors, said: “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. The Board thanks her for her considerable contributions to VMware and wishes her every success in the future.”

Greene founded VMware in 1998 with her husband Mendel Rosenblum, a professor of computer science at Stanford University.

EMC acquired the company for $635m in 2004 and at present has an 80 per cent share of the virtualisation market. Despite this, VMware’s stock has continued to fall in value over fears it can't maintain the 100 per cent growth record achieved over the past nine years.

“VMware is in a tremendous position to extend its lead in the virtualisation market. VMware’s board of directors is very pleased to be able to appoint an executive with Paul’s experience and track record to lead VMware to its next stage of growth and development,” said Tucci.

Tucci said Maritz has decades of experience building Windows and was an instrumental part of the core executive leadership team in building much of Microsoft’s success.