Feature

Looking back at Paul Maritz's tenure as VMware CEO

VMware is, yet again, at a crossroads as we approach VMworld 2012. VMware CEO Paul Maritz will step down from his position in September to make way for his replacement, EMC executive Pat Gelsinger.

During his four-year tenure as VMware Inc.'s CEO, Maritz has certainly made his mark on the company, steering it through a period of tremendous growth and a series of big acquisitions -- including its largest ever just last month.

Let's take a look back at some of the highlights of Maritz's time as head of the virtualization giant.

A new VMware CEO and a new direction
Maritz took control of VMware in 2008, stepping up from his position as president of EMC Corp.'s cloud computing division to replace ousted VMware CEO and co-founder Diane Greene. The leadership change surprised many, coming at a time when the company was experiencing something of a hiccup. Stock prices had recently tumbled on news that it was lowering its financial expectations. At the time, Maritz was known mostly for being a former Microsoft executive.

A few months later, Maritz kicked off VMworld 2008 with his first keynote address as VMware CEO. Some users at the event expressed relief and said his speech gave them confidence in his ability to lead, even as Maritz faced the challenge of keeping the VMware name at the top of the virtualization technology providers' list. Five short months later at VMworld Europe, Maritz announced that the next release of VMware's Virtual Datacenter Operating System would be called vSphere and described it as a "software mainframe." It was a big year for VMware, which revised its vCenter suite and added features such as fault tolerance.

Perhaps the most controversial change Maritz ushered in was the new vSphere 5 licensing model.

However, that big year didn't look great on paper, with the company's stock price continuing to slide in the months immediately after Maritz took over, reaching a low of less than $19 per share in November 2008. It didn't take long for VMware to reverse that trend under the new CEO's leadership. VMware's stock price grew steadily through 2009 and 2010 with Maritz at the helm. It hit an all-time high of $118 per share earlier this year.

A larger vision for VMware
In 2011, VMware announced plans to add more than a million square feet to its Palo Alto, Calif., campus -- a sign that it had matured from its humble beginnings as a niche technology company into a true Silicon Valley giant.

Perhaps the most controversial change Maritz ushered in was the new vSphere 5 licensing model. The move to charge per CPU with a virtual RAM (vRAM) limit drew significant criticism from users. Maritz and VMware at first stayed firm on the premise of the new pricing model despite complaints. But eventually the company responded by upping vRAM limits.

In the past few years, we've seen Maritz's vision for VMware extend beyond virtualization. Under his management, the company's many acquisitions (fueled by growing revenues) included Cetas Software, DynamicOps, Socialcast and Zimbra. These purchases both excited and puzzled users. VMware's acquisition of SpringSource in 2009 spoke volumes about Maritz's plan to move VMware beyond virtualization. Maritz all but spelled it out during a conference call to discuss the acquisition.

"This is about making virtualization more application-aware," said Maritz. "We're doing this for the potential for innovation and to help transform VMware into much more than it is today."

More recently, the company has sharpened its focus on cloud computing, with Maritz breaking onto SearchCloudComputing.com's list of top 10 cloud computing leaders earlier this year.

Maritz's departure comes just as its biggest competitor, Microsoft, is preparing to launch a slew of new product updates and releases. If you look close, however, you can see parallels to the company's 2008 leadership change -- a time when Microsoft was releasing its standalone free hypervisor and a new cloud computing strategy.

The question now is whether Gelsinger will respond to the challenge the way Maritz did when he became VMware CEO in 2008. Or, looking at it a different way, one might ask whether the decisions Maritz has made up to now have prepared VMware for the challenges ahead.


This was first published in August 2012

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