Broadband Developments

VMWare is adding a new executive to the stable - Tod Nielsen.  This on the heals of Diane Greene being forced out.

VMware Inc., (VMW: NYSE) the global leader in virtualization solutions from the desktop to the datacenter, announced today the appointment of Tod Nielsen to the newly created role of Chief Operating Officer. Nielsen will report directly to President and Chief Executive Officer Paul Maritz.

Nielsen, 43, joins VMware from Borland Software Corporation where he served as President and Chief Executive Officer since November 2005.  Prior to Borland, Nielsen held several key executive management positions at leading software companies including Microsoft, BEA and Oracle.

“I am delighted to have Tod join VMware and bring his passion for software and wealth of leadership experience to our executive team,” said VMware’s President and CEO, Paul Maritz.  “In this newly created role, Tod brings unique skills and capabilities that will help us improve our operational focus and enhance our execution across all areas of the business.  With Tod on board, I will be able to devote more of my time to the product strategy and development, while Tod focuses more on business, marketing, and operations.  Having worked closely with Tod in the past, I know that we will work effectively together and complement each other.”

“VMware is an impressive company that is in the enviable position of giving customers a significant return on their IT investment which is becoming only more important in these challenging economic times,” said Nielsen. “As an admirer of the company’s strong track record of software innovation, I’m excited about working with my new colleagues at VMware to help our customers truly transform the way they manage their IT resources.”

Nielsen brings more than 20 years of leadership experience in enterprise software and application development to VMware.  Prior to Borland, Nielsen served as senior vice president, marketing and global sales support for Oracle Corporation. Prior to Oracle, Nielsen was the chief marketing officer and executive vice president of engineering at BEA Systems, where he had overall responsibility for BEA’s worldwide marketing strategy and operations, as well as all research and development operations. Nielsen joined BEA after the acquisition of his private company, Crossgain Inc., where he served as its chief executive officer. Nielsen also spent twelve years with Microsoft Corporation, in various roles, including general manager of database and developer tools, vice president of developer tools, and, vice president of Microsoft’s platform group.

All eyes are on post-Greene VMware as it prepares to announce earnings on Tuesday and as analysts speculate about how much cleanup will be included in the results. Yet I think the most important questions to be addressed in the upcoming quarterly earnings call will have more to do with VMware’s competitive response to Microsoft’s recent Hyper-V launch.

And who better than Paul Maritz to be at the helm during the critical questioning; he was, after all, a major player at Microsoft for fourteen years. Diane Greene will certainly be missed. Her legacy as one of the Valley’s most successful entrepreneurs won’t be tarnished by her abrupt exit.

As a preparation for the questioning I’ve included a series of Archimedius posts about the hypervisor smack down. I’ve already seen some of my comments taken out of context to suggest that I’ve predicted a winner. Hardly. In the following posts from ARCHIMEDIUS I’ve talked about competitive positioning, strengths, weaknesses and recommendations. It would be nuts to make a prediction this early.

Background Reading for the VMware Earnings Call

In How VMware could beat Microsoft I talk about the need for VMware to expand their data center footprint, differentiate ESX and monetize unique attributes. This has been the most popular posting within the smack down theme, perhaps because VMware is perceived as an underdog, and readers are wondering what the company could possibly do to prevail.

In Microsoft vs. VMware: the New Battleground I talk about the early reactions to Hyper-V and the considerable new pressure that VMware will be facing as a result of Hyper-V and what that will mean for the virtualization category conversation. It was posted on June 25, just days after the Hyper-V shipping announcement.

For the blogger who said that I predicted a VMware victory I offer How Hyper-V could beat VMware. If VMware growth into the data center slows and they fail to differentiate, then Microsoft would have the closest thing possible to a welcoming party. Microsoft could have time to tackle enough technical limits to data center virtualization and accelerate the process that VMware kicked off.

Yet as I’ve blogged at Archimedius about cloud computing, Microsoft has a double-edged agenda. Its end game may be virtualization as an extension of its domain, not as an enabler of software industry disruption. For more on those implications you can read Google will unleash the Cannibals on Microsoft.

In a more recent post (Microsoft Unleashes the Cannibals) I talk about how larger and more established technology companies have used loss leader bundling in order to commoditize/cannibalize disruptive technologies. Clearly that was at least part of what Microsoft is doing with Hyper-V pricing, etc.

For a perspective on the recent CEO change at VMware you can read Maritz replaces Greene. Most certainly Microsoft’s entrance into the virtualization category had at least some role to play in Greene’s abrupt departure. It seems a stretch to see it as a rare coincidence.

For a little more perspective into the dynamics of data center virtualization and how they may play out you can check out Virtualization-Lite, which is about VMware’s surge into the data center and its quick establishment of beach head deployments in major accounts. Of course, I also suggest why VMware needs to continue its momentum beyond hypervisor VLAN deployments in order to prevail. That outlook may prove to be prescient in 2009. VMware needs to tackle the virtualization barrier in order to move customers beyond VLAN spaghetti deployments.

VMware’s earnings call is July 22. I hope the above selections from Archimedius give you a deeper perspective into the dynamics at play and how they may affect the outcome of the hypervisor smack down.

You can read my disclaimer at About Archimedius.