Partners: COO Eschenbach's Exit Is Sign Of Ongoing VMware Channel Turmoil

Carl Eschenbach

Solution providers Tuesday said the sudden departure of VMware President and COO Carl Eschenbach is the latest sign of turmoil in the VMware channel sales trenches in the wake of the blockbuster Dell acquisition of EMC-VMware.

Several partners said the change comes with their VMware sales flat to down and the company making changes in the sales management team for the post-Dell era.

"It's a big blow to VMware," said the CEO of one of VMware's top enterprise partners, who did not want to be identified. "We see them consolidating and eliminating a lot of channel positions. This is not the same VMware we know, loved, and helped fuel the growth of as a partner. It's not the same company anymore. I can't help but think the looming Dell acquisition is affecting their channel behavior. We are looking at embracing alternatives in the hyper-converged market. My advice to VMware is don't forget who brought you to the dance. Go back to your channel roots."

Fortune was the first to report that Eschenbach, who joined VMware 14 years ago as vice president of sales, was leaving to join the prestigious venture capital firm Sequoia Capital as a partner. During his VMware tenure, Eschenbach helped drive VMware sales from just $10 million to $6.57 billion in sales in the last fiscal year.

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Eschenbach's exit comes just six days after Martin Casado, the driving force behind VMware's highly touted Nicira software-defined networking platform, was leaving to join venture capital firm Andreessen Horowitz. It also comes with the company eliminating about 800 positions and the departure of former CFO Jonathan Chadwick, who resigned in January and was replaced by EMC CFO Zane Rowe.

VMware, Palo Alto, Calif., said Eschenbach resigned for a new career opportunity. The company said Eschenbach's responsibilities will be assumed by other members of VMware's executive team and announced sweeping management changes including the appointment of Maurizio Carli, an eight-year VMware veteran who was overseeing the Americas region, as executive vice president of worldwide sales.

Sanjay Poonen, executive vice president and general manager of VMware's end-user computing unit, is getting an expanded role that includes responsibility for the vendor's global marketing efforts. Robin Matlock, VMware's chief marketing officer who previously reported to Eschenbach, will now be reporting to Poonen.

Jamie Shepard, senior vice president for health care and strategy at Lumenate, No. 145 on the 2015 CRN Solution Provider 500, said he was surprised by Eschenbach's departure.

"This is an impactful loss," said Shepard. "I didn't see this coming at all. Carl was the voice of VMware. He was very supportive of the channel and treated us as members of the VMware family. He was a real 'what-you-see-is-what-you-get' guy who knew the technology and was always out there talking to customers about their business."

Shepard said the change comes with his company's mainstream virtualization sales down, but his VMware software-defined software and virtual desktop business on the rise. He said there appears to be a new executive team taking hold to lead VMware into the future.

"They have got to pick up where Carl left off with a clear direction with regard to product, strategy and channel management," said Shepard. "We trust that VMware understands they need to continue to help us shape the future together."

The CEO of another large VMware partner, who asked not to be identified, said the company's VMware sales are flat and he now sees VMware as an "ancillary pawn" in Dell's acquisition of EMC. "There has been an extraordinary amount of churn with VMware recently," he said. "The product is hitting maturity, there are now viable competitors out there and they are facing this Dell-EMC situation. There is a lot going on."

It's a far cry from the days when VMware, with Eschenbach leading the sales charge, was growing at a breakneck pace with no viable competitors in the mainstream virtualization market, said the CEO. "They had a better mousetrap, a killer solution in the market," he said. "I don't think they ever developed the way a company needs to in order to be a full grown-up company. The challenge for VMware going forward is more sales and organizational rather than technology."