Virtualisation trailblazer VMware caught market watchers off-guard last week by replacing Diane Greene as its chief executive. The move comes as VMware faces intensifying competition, most notably from Microsoft.

VMware announced the departure of Greene, one of its co-founders, amid signs of slowing growth and rumours of a fallout between Greene and Joe Tucci, chief executive of EMC, which owns 86 per cent of VMware.

In getting rid of Greene, VMware’s owners have tacitly acknowledged that the company faces new challenges, Gartner’s Phil Dawson said. “Diane was a good chief executive in the good times, but is she the best person to lead the company during a wobble?” he remarked.
Dawson also noted that customers may be uneasy about the prospect of EMC taking a more hands-on role in running the firm.

“Is EMC getting tighter control over VMware during a tight spot – and is this a good thing?” he asked. “As virtualisation technology commoditises into the hardware, the value moves into the management tools. VMware needs to differentiate itself in the management tools space, because
it will be under price pressure to compete.”

Greene’s exit also comes hot on the heels of Microsoft making its Hyper-V hypervisor generally available. “VMware is now in a different market,” said Butler Group analyst Roy Illsley. “With Microsoft in the market, VMware needs to make sure it doesn’t end up like Novell in the 1990s.”
Illsley said VMware needs to change from a technology-led firm into a marketing-led one.

“When battling Microsoft you need to have a strategy to market your solution in different areas,” he added. “VMware is becoming relatively isolated in the industry. It needs to build partnerships.”
Greene has been replaced by Paul Maritz, a former Microsoft executive who was responsible for the development of Windows 95 and NT.

In related news, experts warned last week that the recent growth in virtualisation uptake could be held back by a shortage in capacity planning skills.
Jonathon Priestley of BMC Software said, “Predicting storage, network and processor utilisation for a bunch of apps running on a single piece of hardware is complex.”