Why has VMware’s founder been ousted from the vendor she grew so well?

So Diane Greene, co-founder of seemingly unstoppable virtualisation vendor VMware, has left the company she helped build over the past decade.

Few companies can match the growth VMware has witnessed in recent years and based on results it is difficult to fault the work of Greene.

However since 2004, 85 percent of VMware has been the property of storage giant EMC and it is rare to see founding members of firms stay at the helm long after such an acquisition.

The reason for Greene’s departure? EMC’s Joe Tucci told Reuters news service that Greene was replaced by former Microsoft exec Paul Maritz, because VMware’s board wanted someone with more operational experience to lead the company into its next growth stage.

Tucci also said he had asked Greene to take another position within VMware, but that she declined. I don’t blame her. She is a founding member of the firm and he wants her to go back to doing the coffee run? That would be awkward for Greene and her co-workers alike.

This was an interesting development for me as I’ve met both Greene and Tucci in recent years. Three years ago at VMware World in Las Vegas I interviewed a truly knowledgeable and charming Greene, who seemed humbled by the attention her company was witnessing at the time. Last year in Sydney I attended a media roundtable with Tucci who struck me more as a modern day rendition of Marlon Brando’s Don Corleone. Tucci seemed abrupt and at one time rattled. One journalist managed to hit a nerve by asking if VMware’s huge success was clouding EMC’s efforts. Basically was VMware the cash cow keeping EMC in the dollars? This didn’t go down well with The Godfather.

He simply snapped back ‘why would that bother me? We own VMware’. He had a point, but the anger in his voice also revealed more than it should have done.

Thinking about it, what has EMC actually done with VMware? It has overseen a huge growth period for the firm, but this escalation of success was inevitable. The VMware rollercoaster was already in full swing when EMC jumped onboard.

It’s interesting to see EMC had a ready- made replacement in the form of Maritz. I sincerely hope Greene’s departure is not linked to her lack of testosterone. Maritz’s move to take over as president and CEO of VMware leaves a hole in EMC, where he was president of EMC’s Cloud Division. The EMC spokesperson said that EMC currently has no plan to fill that position, but instead has a number of senior leaders who will continue the company’s push into cloud computing. Maritz will be available to provide strategic guidance regarding EMC’s cloud computing initiative, the spokesperson said.

So how much of an effect will Greene’s departure have on VMWare? Considering the wealth of experience still at VMWare and EMC, alongside the firm’s huge popularity, probably not a lot. VMware is still the standard in server virtualisation.

That said, VMware’s stock prices plunged on the news of Greene’s departure from $53.19 at the opening bell of the stockmarket to as low as US$36.51 before climbing back to $40.19, ending the day down by 24.4 percent. This is likely to be recovered, but the market obviously values the input of Greene.

Greene’s departure also casts a cloud over the future of VMware’s chief scientist, Mendel Rosenblum, Greene’s husband. What does he make of it all? Actually, he’s probably over the moon!