VMware changes affect the market and possibly partnerships

Now that we’ve have had some time to reflect on the news about VMware’s removal of Diane Greene from her role as CEO with the company, it looks like the virtualization market is going to be a very different place. VMware’s stock is down to nearly $40 a share, the company isn’t expected to continue its revenue run rate climb, Microsoft Hyper-V is out in the wild now, and a former Microsoft employee named Paul Maritz is now in charge of VMware.

So what’s next for VMware and its management team with all of these changes?

Frank Gillett, VP and principal analyst at Forrester believes that VMware’s product and technology road map is very strong, but added, “I think that VMware’s management team needed to start shifting the company from virtualization to higher vision/strategy/brand and value proposition, and that they should have started working on it by early this year — before the Microsoft launch of Hyper-V. Microsoft is correctly focused on the vision of ‘Dynamic IT’ not just virtualization, but is not effectively marketing and messaging this in ways that support the products today.”

A few days later, virtualization vendors and VMware partners were still reacting to the news.

“We read with great interest of Diane Greene’s departure from VMware”, said Chris Akerberg, president and COO of Vizioncore. “Diane took a startup from its inception in 1998 and, in less than a decade, created an influential and profitable company that has transformed IT and opened the door for companies like Vizioncore to solve key long-standing IT challenges through virtualization.”

Akerberg continued, “Those of us in the VMware ecosystem acknowledge Diane’s contributions to our industry, and we wish her the best in her future endeavors, which we will also follow with great interest.”

David M. Lynch, vice president of marketing at Embotics, said Diane Greene was a strong and charismatic leader who focused on the technology — which is ideal for a technology startup. But Lynch said, “VMware is now entering a new (and highly competitive) market phase, and the skills and focus that served the company well during the initial phases are not the skills needed to deal with the market challenges that are now occurring. It is very rare that a founder of a startup will see that company through to its maturity.”

So what happens now in a post-Greene VMware world? Specifically, what changes do the vendors foresee in the way they will work with VMware going forward?

Lynch had an interesting take on the partnership side of the fence. He said, “On the positive side, VMware has never been a partner-centric company. It has been trying to change that over the past year, but it has proven difficult. The culture hasn’t changed much and they are still a difficult company for a technology partner to deal with. This is in clear contrast with their biggest competitors, Microsoft and Citrix, who are very partner-oriented. A new leader, with a new vision, could change this for the better.”

Lynch added that on the negative side, any change of a successful leader is going to create morale problems, and if it isn’t dealt with they will affect the whole company and, in turn, affect its relationships.

Vizioncore’s Akerberg stated, “As a long-term and leading partner of VMware, Vizioncore will continue developing a set of solutions that extend and enhance the value of the VMware platform, and we look forward to working with Mr. Maritz as the new President and CEO to foster our mutual success in the future.”

So what about Paul Maritz taking over the company? What happens next?

Gillett said that it will be a very tricky period for VMware, with a new, outsider CEO imposed on the company. And he added, “It could result in fixing my concern about long-term business direction or it could falter because of the transition.”

Next up, we’ll find out what the quarter financials look like for VMware, and then wait to see if Maritz does anything special with VMware partnerships.