VMware shakeup: Maritz is reportedly out

Paul Maritz - CEO, VMware - Structure 2011

A tech trade publication is reporting that VMware CEO Paul Maritz is being pushed out and will be replaced by Pat Gelsinger, the current COO of EMC. EMC owns roughly 80 percent of VMware, the market leader in server virtualization. It’s a rumor we’ve been hearing since June, and on Monday night, CRN published a report that says it has confirmed those rumors, citing “multiple sources familiar with the situation.”

Other rumors circulating say that Maritz has been offered the role of chairman, but not the CEO, of the spin out of the CloudFoundry, Rubicon and Greenplum assets that we reported on this afternoon.

If Maritz is indeed out at the company after four years at the helm, it may be because VMware has let its lead on virtualization — its core business — slide while pursuing enterprise applications and higher-level software. VMware spokespeople declined to comment, citing the company’s policy of not commenting on rumors. VMware pioneered virtualization through its hypervisor, which abstracted the server hardware from the operating system. The new ability to run multiple OSes on a server enabled cloud computing.

The irony is that most large cloud computing vendors such as Amazon and Google don’t use VMware’s hypervisor, but use a customized version of the Xen hypervisor. Even as the hypervisor, which paved the way for virtualizaiton was commodified, VMware moved into higher levels of the infrastructure, finally emerging as a real player at all levels including end-user applications.

But as my colleague Barb Darrow wrote today, that move up the stack cost it momentum at the lower end of the server virtualization market. Instead of buying things like Zimbra from Yahoo, VMware needed to keep its eye on the management of scaled-out enterprise infrastructure, focusing on building software to monitor and manage multiple cloud environments and span hybrid clouds, critics say.

Now the company is also losing talent and facing competition at the hypervisor level from Microsoft with its Hyper-V and Windows Server tandem, OpenStack, and even from infrastructure as a service providers — notably Amazon — which run their own customized Xen-based hypervisors. It has some answers to the problem of competing in a cloud world on hand, and as we reported this afternoon, it is taking steps to consolidate those into a separate spin out.

As IT transitions from enterprises operating their own infrastructure and spending their cash on buying VMware software to better utilize that infrastructure to allocating their dollars for cloud computing on demand from an Amazon or other vendors, VMware has to find a way to keep the enterprise dollars flowing its way.

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