EMC Set to Geek Out, VMware To Refocus on the Franchise not the Future. All Change Please

Earlier this week I was with Alcatel Lucent in Naperville, Illinois when a tweet came in that Paul Maritz, VMware’s CEO, had been dismissed from his post. I would have thought the idea was absurd, except that rumours had also been swirling that VMware was planning to spin out its cloud assets into a separate company comprised of its Cloud Foundry and Greenplum assets. Smoke, fire, etc.

VMware’s PaaS play Cloud Foundry is certainly in transition – after the burst of excitement last year when the technology hit the market, we saw the departures of folks like project lead Derek Collison, CTO and chief architect, to found his own company Apcera, one of the hottest stealth startups in the valley right now. VCs are desperate to back Collison whatever he does next, and he’s been hiring folks from his TIBCO days, and from Google [Justin Smith, an “identity geek”. distributed abstracted cloud meets identity. hmmmm].

But SpringSource, the acquisition that got VMware into the middleware game, is also in flux now. Rod Johnson, SpringSource founder, recently left the firm, soon after vesting. The fact Cloud Foundry was built in Ruby rather than Java meant that there was plenty of internal tension on technical direction. Also bear in mind that VMware classic was not an open source play, wheras SpringSource and Cloud Foundry both are.

Derrik Harris over at GigaOm brings a really good perspective to the table concerning departures at VMware – Brain Drain a Sign of Influence or of its Demise? Essentially VMware has recently had a surfeit of talent come in, and its natural folks would move on (especially after vesting). He points to:

• Former Principal Engineer Satyam Vaghani (he co-founded ProximData)
• Former Principal Engineer Ganesh Venkitachalam
• Former VP of Product Strategy Shaun Connolly (to Hortonworks)
• Former VP of Business Operations, Cloud Application Platform Mark Brewer (to Typesafe)
• Former R&D Director Howie Xu (to Big Switch Networks)
• Former Senior Member of the Technical Staff Suresh Madhu ( he founded Onecloud Labs)

Derek finishes his post thusly

VMware has all the technological pieces it needs to stay relevant — even to lead the way — for a long time to come. But it still has to capitalize on them and create a cohesive vision for how they interact with one another and then continue to ensure they remain on the cutting edge. That’s gonna take the right people.

The right people. Indeed. Which brings us back to Maritz, and the mothership. It turns out that Maritz is moving over to EMC in a technical strategy role, while Pat Gelsinger, EMC’s COO is taking on the VMware CEO role. EMC is a huge, extremely well-managed company, and Gelsinger is very much on top of operations, and running a tight ship. Its fair to say Maritz is more experimental, more blue sky, and this is probably not the time for VMware to get too far ahead of the market. It has strong challenges coming from both Amazon Web Services (affecting its service provider business) and Microsoft (playing its well rehearsed game of copy and commoditise). Its important to stress Maritz didn’t do a bad job though – VMware just announced preliminary second quarter results, including record quarterly revenues of approximately $1.123 billion, up 22% over second quarter 2011. Most enterprise CEOs of major firms would kill for that kind of growth. And yet challenges remain – given how many vectors of disruption we’re seeing in the market. On that note, as I just tweeted, in thinking about Gelsinger’s experience in x86 gained in his years at Intel:

 oh! what if VMware moves into the server market? Gelsinger has hardcore x86 chops. the future of software is not software

What do I mean, the future of software is not software? Ask Stephen. Microsoft has Surface. Google has Nexus. IBM has PureSystems. Oracle has Sun. Oracle software revenues are all maintenance, with new license growth slowing (now down in the 3% per annum range).

So horizontal is out, vertical integration is strongly back in. Of course it might seem absurd that VMware would look to sell servers, given its tight relationship with the VCE alliance, which packages up EMC VNX storage, Cisco UCS blades and switches, EMC Ionix UIM/P for provisioning and VMware vSphere for virtualization. And yet…. who would have expected so many software players to be morphing into integrated systems players? And let’s face it, Cisco is currently kicking ass in the server market with UCS. So whether VMware goes heavily into hosting, or does start selling servers, I do think we’re going to see it make some aggressive hardware-related moves, with Gelsinger running strategy and ops.

So what of Maritz? It seems to me that EMC needs a burst of unpredictability from a software perspective. It has acquired numerous software firms, yet we never seem to hear of them again, VMware notwithstanding. Why? Because historically EMC isn’t interested in courting developers. Maritz on the other hand, is so interested in software developers he was prepared to stand in front of VMware’s core customers and tell them they were not where business value lies. I talked to these points in this analysis last year, VMware CEO: Django, Rails, Open Frameworks, Packaged Apps as Commodity and The New Kingmakers. Let me quote Maritz again, talking to an audience of ops people.

“Developers have always been at the leading edge, because that’s where business value is generated. Things that don’t differentiate you at a higher level will be SaaS apps – which will also be purchased at a higher level. The differentiated stuff you have to do yourself, and that means software development”.

So at a VMWorld keynote you had the CEO talking about Django and Rails, environments the audience had likely never heard of. I am pretty sure we won’t see Gelsinger do anything similar.

So now we have Gelsinger running and refocusing VMware, while Maritz moves over to EMC to start fostering some developer thinking there. Or at least that is my first take. Now it could be, that as per the story above, EMC spins out some of the VMware assets, or perhaps not. It could even be that some VMware code is is moved over to EMC.

This post is somewhat speculative, and it could be that everything changes again by next week. But I wanted to make sure I got my thoughts down.

 

disclosure: Microsoft, IBM and VMware are clients. Amazon, EMC, Google, and Oracle are not.