Rebuilding VMware
By
Anders Bylund
September 3, 2008
|
The power shift at VMware (NYSE: VMW) ain't done yet.
Last November, then-CEO Diane Green scored a minor coup by luring 20-year Oracle (Nasdaq: ORCL) veteran Richard Sarwal into the waiting arms of the virtualization pioneer. Nine months later, the prodigal son returns to Larry Ellison's side.
The official word is that Richard "resigned" from his executive VP post of R&D, and we don't know what role he'll play in his Oracle comeback. Some observers lament the bad timing of his departure; VMware already has to deal with new blood in the CEO office and other upper-echelon executive seats. But that's looking at the issue entirely backward, I think.
Think about it for a second. Sarwal was hand-picked by Greene, and her own exit from VMware certainly didn't feel like a friendly, amicable parting. New CEO Paul Maritz, with years of experience from Microsoft (Nasdaq: MSFT) and Intel (Nasdaq: INTC), likely wants to reshape VMware in his own image, working with people that make him comfortable.
I wouldn't be surprised to see Maritz pulling in a familiar name from his Microsoft or EMC (NYSE: EMC) tenures to replace Sarwal permanently. CTO Stephen Herrod fills in until then.
It's easy to find more examples of this iron-fisted kind of culture change. Heads rolled left and right when Carly Fiorina took over Hewlett-Packard (NYSE: HPQ) -- and again when she was forced out to install Mark Hurd. Even family-friendly Walt Disney (NYSE: DIS) and its amicable big cheese Bob Iger cleaned house at the top when Michael Eisner left (kicking and screaming). You can't lead a business into greatness with a staff built to fit somebody else's idea of awesome management talent. You need some of your own peeps at the top.
So Maritz is building the team he wants. The man has an impressive resume, and he is not likely to lead his company to its doom. Check back in a couple of years, when Paul's management style has had some time to work the way he intended. The virtual machine market is his to lose, and I think he's much more likely to simply grow the business and its market impact. Eventually, the stock price should follow.
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