VMware chief executive officer Diane Green is ousted and x-Microsoft leader Paul Maritz is put in place.
VMware stock price sank on the news (who would have guessed?)
Back in January, I blogged about the troubled times I saw ahead for VMware; making a comparison to Novell's rise and fall. Similarities continue to abound. Remember Bob Frankenberg being ousted from Novell? Remember Novell brought in Eric Schmidt (now Google's Chief) to save the day?
VMware has adjusted its earning forecasts lower for the remainder of the year. Wall Street never likes it when a company does that, and they are feeling the pain. There is a relationship between the company's slowing growth and Ms. Green's departure. The board needs the company to change its focus and direction as the virtualization market matures. As BurtonGroup has stated, 2008 is the year of choice in virtualization solutions in the x86 commodity server world. Xen solutions from virtually (pun intended) everyone and their dog, Hyper-V from Microsoft, not to mention the slowing economy is spelling a drastic need for change at VMware. VMware's board is looking for that change of focus in appointing a new CEO.
My experience has been that the success of a new CEO coming on board is 30% the CEO's abilities and 70% the rest of the employees in the company being able to take a step back and recognize the changing market around them such as changes in what's important to users and focus their development and go-to-market efforts around those changes.
As I mentioned in my January blog, VMware has great opportunities; they just need to act on them and quickly.
[Posted by Richard Jones]