Executive Shakeout: CEO Diane Greene Out At VMware

Greene was replaced as president and CEO by Paul Maritz, a former Microsoft exec who joined EMC when that company acquired software startup Pi Corp. in February.

Storage giant EMC, which acquired VMware in 2004, holds an 85-percent stake in the company despite spinning off part of it in a successful IPO last August.

With the switch in leadership, Maritz has also joined the VMware board.

Joe Tucci, chairman of VMware's board and chairman, president, and CEO of EMC, said in a statement, "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. . . .(Maritz) is a leader in the software industry. He has decades of experience building one of the greatest franchises in software history, Windows. Paul was instrumental as part of the core executive leadership team in building much of Microsoft's success."

Maritz retired from Microsoft in 2000 after 14 years during which he managed the development and marketing of such products as Windows 95, Windows NT, and database and other applications.

Maritz in 2003 founded Pi Corporation, a startup software company focused on building Cloud-based solutions for new ways of doing personal information management. He is currently president of the EMC Cloud Division.

Neither EMC nor VMware responded to requests for further information.

VMware's stock prices plunged by more than 26 percent to just over $39 by late in the trading day on the news of Greene's departure.

Rosenblum, VMware's chief scientist, was a professor at Stanford University doing research in bringing isolation to operating systems for security, fault-tolerance, and resource isolation when he thought of server virtualization using existing hardware and operating systems.

Greene, in a January interview with ChannelWeb, said Rosenblum came home one night and said he figured out how to do just that. "So he just went to work the next day and started doing a project to prototype it," Greene said. "They did it on the MIPs[-based computer]. We got to talking with the grad students and we said, 'Look, this would be really valuable to bring to the x86 industry-standard systems.' So we launched the company."

Greene ran the fledgling company based on her experience with startups, and led it to prominence in the server virtualization market where, despite competition from multiple vendors it still has an 85-percent market share.

Financial analyst Robert W. Baird & Co. estimated that less than 15 percent of the server installed base is currently attached to server virtualization, and that it expects that rate to potentially rise to over 40 percent in the future.

Baird said that VMware's growth is slowing, but that it is still strong, with two of its largest resellers expecting over 50 percent growth in 2008. However, Baird said, VMware also just said it expect 2008 growth to be "modestly" below the 50 percent it previously offered as guidance.

The biggest potential impact to VMware's market share comes from Microsoft, which last week released its Hyper-V server virtualization technology to manufacturing.