VMware and EMC swap execs and look to data center's future

Paul Maritz becomes EMC chief strategist, while Pat Gelsinger takes over as VMware CEO. Will the swap further companies' cloud plans?

One of the latest VMware rumors has finally been put to rest. After four years at the helm of VMware, Paul Maritz is being replaced as CEO by EMC chief operating officer Pat Gelsinger, effective Sept. 1. As part of this executive move, Maritz will go back to EMC in a newly created role as the company's chief strategist. But Maritz won't be completely gone from the virtualization scene, as he will remain as a member of VMware's board of directors.

As part of this executive shakeup, EMC's chief financial officer David Goulden was promoted to the position of president and chief operating officer at EMC, filling the hole left by Gelsinger's departure. Goulden will wear multiple hats, as he retains the role and title of CFO.

[ Also on InfoWorld: VMware opens up to multihypervisor support with acquisition of DynamicOps. | Find out how to get all the advantages of a desktop PC but none of the hassles in InfoWorld's Virtual Desktop Infrastructure Deep Dive report. Download the PDF today! | Keep up on virtualization by signing up for InfoWorld's Virtualization newsletter. ]

After the official announcement, the two companies took to the airwaves to try and calm the investor community and its virtualization customer base. The companies also delivered preliminary financial results for the second quarter, which ended any speculation that Maritz was leaving because of poor financials. The virtualization giant is projecting record quarterly revenues of approximately $1.12 billion, up 22 percent from Q2 2011. VMware also expects full-year 2012 revenues to be somewhere between $4.54 billion and $4.64 billion.

In Maritz's four years leading VMware, he posted record income, maintained market domination in the server virtualization in the face of increased competition, and expanded the company into new markets such as the cloud, mobile computing, applications, and desktop virtualization. During his reign, the company also acquired a number of new technologies, expanded its workforce, and is currently in the process of doubling the size of its campus -- all in a down economy.

"Today we are witnessing an extraordinary transformation in the IT industry unlike anything we have seen before -- a major shift to cloud computing, big data applications, and delivering IT as a service," said EMC chairman and CEO Joe Tucci in a company statement.

Why, you might ask, make this change now?

On an analyst conference call, Tucci responded to that question: "We have a great strategy and opportunity, and we are executing well. One of the things I've learned through my career is the time to make these kind of changes is when you are in a position of strength, when you are performing well and when you have customer permission to play in these new markets."

Tucci added that VMware is moving to the next phase of cloud computing with the software-defined data center and solving the problems of the post-PC era. And it is facing tremendous opportunities around data and new products. While Maritz and team have done a "stellar job" in positioning VMware as a leader of that transformation, EMC and VMware now need to make adjustments that will allow them "to become the leaders in building out the complete, software-defined data center."

Maritz said that moving on would give him the freedom to think about some of these new application-oriented opportunities, and the company could address two of those very big opportunities: cloud infrastructure and what you can do on top of that cloud infrastructure.

The executive shuffle may make sense, but the news still came as a surprise to many industry pundits following EMC. Gelsinger, a former top executive at Intel, joined EMC in 2009 as COO and was widely believed to be Tucci's likely successor. Is that still the case, or is Maritz now the heir apparent? We may not know the answer to that question any time soon. During the analyst conference call, Tucci said he will remain chairman and CEO of EMC at least through 2013. But when the time comes, Tucci still expects his successor to be chosen from within the company.

Not confirmed during this announcement was the rumor of a cloud spinoff. Speculation has placed EMC's Greenplum big data analytics tool and VMware's open source Cloud Foundry project among the assets in the supposed spinoff.

However, VMware's Cloud Foundry PaaS isn't exactly capturing market share. Cloud Foundry supports Java, Node.js, and Scala, but it competes with offerings such as Microsoft Azure, Google App Engine, and Red Hat OpenShift. And if a joint VMware and EMC Project Rubicon were in the mix, it would have to contend with Amazon Web Services EC2, Google's new Compute Engine, and OpenStack on the IaaS side of the cloud.

VMware vSphere hasn't exactly set the cloud world on fire either, and the open source Xen and KVM hypervisors seem to be giving VMware fits as they stake their claim in the growing cloud market.

Still, a new coordinated cloud effort could still make some serious waves. The question becomes, how far are VMware and EMC willing to go to get to where they want to be in this expanding cloud market? Keep your eyes on the cloud prize and watch to see if the spinoff rumors turn out to be true.

This article, "VMware and EMC swap execs and look to data center's future," was originally published at InfoWorld.com. Follow the latest developments in virtualization and cloud computing at InfoWorld.com.

Copyright © 2012 IDG Communications, Inc.

How to choose a low-code development platform