For VMware, an Uncertain Future

VMware, which single-handedly created a market for virtualization, is currently faced with the threat of commoditization of its core product, increased competition and fiscal uncertainty. The question is, did EMC Corp. kill this golden goose? Continue Reading.

Virtualize This: VMware CEO Out, Stock Tanks, Big Revenue Miss

Wow…this came as a complete and total surprise. VMware has announced that Diane Greene, president and CEO of the hot virtualization company is leaving and will be replaced by Paul Maritz, whose company, Pi Corp., was acquired by EMC Corp. back in February. I am flummoxed by this move since VMware has been on an upswing and despite increased competition, has been pretty bullish about the future.

Greene didn’t give any hint to her departure when I met her at a recent tech gathering. More importantly, when I was hanging out with VMware co-founder (and Greene’s spouse) Mendel Rosenblum at our Structure 08 conference, he pointed to rosy skies ahead. At the bottom of the press release announcing her departure, however, is information indicating that the company might be facing a rough 2008, which explains the sudden change in management.

VMware expects to announce earnings for the quarter ended June 30, 2008 as scheduled on July 22, 2008 at 2pm PDT. On that call Paul will make observations about the second half of 2008. While VMware is not updating guidance for Q2, we expect revenues for the full year of 2008 will be modestly below the previous guidance of 50% growth over 2007.

The markets aren’t too happy — the stock has tanked more than 30 percent already to as low as $36.51 a share. Shares of EMC are taking a pounding as well, falling as much as 13 percent to change hands for $13.18.

I think something big is going on — no CEO and co-founder just up and quits the company. The numbers might be worse than they seem. Did Greene pay the price for the missed numbers or is there something else going on?  Read More about Virtualize This: VMware CEO Out, Stock Tanks, Big Revenue Miss

The F|R Interview: VMware Co-Founder Mendel Rosenblum

During a break at GigaOM’s Structure 08 conference this week, Found|READ sat down with VMware co-founder and chief scientist, Dr. Mendel Rosenblum.

Dr. Rosenblum developed VMware’s virtualization software while working on a supercomputer research project with his graduate students at Stanford University, where he remains an active professor of computer science. In 1998 he went on leave from Stanford to launch VMware with four business partners, including his spouse, Diane Greene, who remains the company’s CEO. It wasn’t easy going. Back then, VCs had a hard time wrapping their minds around the business opportunity in Dr. Rosenblum’s software, which allows one server to do the work of many.

Today, VMware has 100,000 customers and is expected to sell nearly $2 billion worth of its products this year. And that’s after debuting on the New York Stock Exchange last summer in one of the most successful IPOs since Google.
Om spoke with Dr. Rosenblum in December about the history of the company and state of the virtualization market. Here Dr. Rosenblum talks about being a founder. Read More about The F|R Interview: VMware Co-Founder Mendel Rosenblum

STRUCTURE 08: VMware Cofounder Mendel Rosenblum

VMware’s co-founder and chief scientist Mendel Rosenblum is on the couch, getting grilled by Om and Arnie Berman, chief technology strategist, Cowen and Company.

Mendel Rosenblum at Structure 08 with Om Malik and Arnie BermanRosenblum says:

Virtualization is a wide term. What we’re seeing is, at some level, decoupling software from hardware is a just a better way of doing it. That is only a piece of what virtualization can do.

Om: You’re already thinking beyond plain vanilla virtualization. Are we at the stage where virtualization gets commoditized?

Rosenblum: You can buy your machines from Dell and just check a box to have this included. Our vision is this plugs into the distributed system that manages the whole data center. I agree with you that bits of code that come bundled with the hardware are becoming commoditized. But the value proposition of really smart software that moves things around has fortunately not been commoditized yet.
Read More about STRUCTURE 08: VMware Cofounder Mendel Rosenblum