I’ve been on my holidays recently. Sometime spent with my folks up North. My mum recently had a pacemaker fitted so we wanted to see she was okay after her op. Then me and my partner went to Barcelona for a break. Before I went away I did see the news that Dianne Greene had been removed/sack/left her position as CEO of VMware. I didn’t blogging about it at the time because… well, a number of reasons….

Firstly, I wanted to wait and see what the story really was after the dust had settled. There was lot of hysterical blogging at the time – which I have kept an eye on. Secondly, heck I was on holiday - and there is more to life than virtualization and VMware. I saw a number of families on holiday at the airport with guys with one eyes on their screaming kids, and another eye on their BlackBerry. That doesn’t sound like much of a holiday to me. Finally, I don’t think my opinon (a mere blogger) amounts to a hill of beans in this crazy world (as Rick said), having been a small cog in a wheel – I understand that these changes are occour without much dialog to those at the bottom of the food chain – and the boardroom machinations of C-Class execs has little to do with my world.

I could sit here and disect the stuff I’ve been reading on other websites – but quite honestly the tittle-tattle and gossip mongering that surrounds these events doesn’t really float my boat. What I want to do pin-prink some of the hogwash thats circulating.

Stock Price Thang…
Firstly, the share price thing. When the announcement came the share price dropped, next to this was a warning that VMware might not make its earnings expected. I forget the numbers, but VMware has been growing at 100% or more, and think for the first year they said this would be less like – 75% or 50%. So, lets kill this off right away. A downturn in VMware stock price does not indicate a downturn in the companies fortunes. We all know the stockmaket is total bull****, and riddled with speculation. These are very volitile times in the market right now. The people who sold on duff mortgages responsible for the “credit crunch” and a lack of “liquidity” (read: a lack cheap money/credit with little investigation if the customer could afford it), have moved on to speculating about the price of commodities (raw food/oil). In our techology connected world all it takes is the butterfly wings of speculation to flap on the Dow Jones, and that will take 2% of the FTSE when London opens.

The fact is VMware is still making great revenues. Still makes products that people want to buy. In fact compared the airline or the building industry – techstocks are actually pretty strong. Many of you probably work in big corporates that don’t have a fraction of profit margin that VMware has. What the stock price does show is how badly managed the departure of Greene was. Any management decisions that wipes unneccessarily the value of the company is not going to make investors, and employees who hold valuable stock options best pleased.

Should have Greene departed?
There will be many that will be sad to see Greene go. Especially, the people who worked for the company when there was less than 300 staff. That’s only natural, that personal loyalities are strongest when you have almost daily personal contact with the founders of a company. VMware now has some 6000 employees worldwide and I doubt if they feel the same way. That’s all so very natural. The bigger a company becomes the more remote the management team are (whether you like that or not its a fact). Personalilities matter less and less, and I personal think the bigger the organization the team at the top will struggle to steer the oil-tanker which is a mulitnational, especially ones where the internal corporate culture has a mind of its own. That said despite being much bigger company VMware is still small enough that it can be steered affectively.

Anyway, I never met Greene, and she was never my boss – so who am I to say how good she was at her job. To be honest I rather liked the semi-professional approach that the Dianne/Mendal brought to the table. That’s not a disparaging or barbed comment. I’m not saying there won’t completely professional. But just how I like politicians who haven’t tutored by spin doctors and media people – I like the direct approach. So perhaps Mendal and Dianne never looked very comfortable being on stage at these big conferrences I attend. But at least there was something human about them. Perhaps like you – you have a soft spot for companies that are founded on kitchen tables in Palo Alto, who take on the big guys. I’ve always sided with David over Golliath. Anyway, putting such sentiment aside – in the hard-nosed corporate world occupied by those same big guys – once they own 85% of you it becomes much harder to persist with this dress-down everyday approach to business. The IT world is red in tooth and claw and perhaps employing an ex-Microsoft guy is the best way to take on Microsoft.

I understand why Greene didn’t want to take another (titualar?) position within VMware. Would you if founded your own company? Personal I’d rather sail around the Med on yacht if someone was daft enough £1M for RTFM. If you run your own business – its all or nothing. Your either fully in charge or not. It’s your baby, and its quiet difficult to hand over your baby to another person. Some people have taken the husband/wife partnership to indicate that Mendal will leave as well. That might well happen I don’t know. Perhaps he might be happy to move to less hands-on, technical role – to more a founding-father guiding role. Who knows maybe that’s what he does now? I think its more likely the original management team might see some departures – after the new guy will want to make sure they are loyal to the new Caeser – and when you take on mangement role its currently the fashion to do some “restructuring”. You have to be seen to be doing something after all. In time we might take the changes in a much broader way. For a while the “Geeks” were in charge, now “corporate types” have moving in. This shows a much a longer trend which could be a good one. The end of VMware having “start-up mentality” to adopting a true “enterprise” approach to service delivery. VMware will remain a bleeding-edge, technology focused company – but perhaps with a slicker marketing, PR and sales force to rival its competitors. i.e Microsoft

In final analysis – whatever the hystics say – people buy products because they are good, work well and are resonably priced against competitors products. As long as VMware gets this right – then the company is fine. I don’t see many people buy or not buy product based on who the CEO is the week.

By the way, did you see that AMD have changed its CEO recently. Are you that bothered? No, I thought not.

This entry was posted on Sunday, July 20th, 2008 at 1:38 pm and is filed under Other. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.