Close Window

Print Story

Remaining VMware Co-Founder Bails

After VMware's parent company EMC removed his wife Diane Greene as CEO on July 7, VMware co-founder and chief scientist Mendel Rosenblum has followed Greene out the door. Reportedly she was dismissed for failing to meet sales expectations by a country mile and for failing to keep costs in line. At VMworld in Vegas next week the company is expecting a record 14,000 people.

In a show of spousal loyalty, VMware co-founder and chief scientist Mendel Rosenblum has followed his wife, ousted VMware CEO Diane Greene, out the door. He will focus on his other job as a Stanford professor.

The timing of Rosenblum's announcement that he's leaving reeks of bad feelings over his wife's dismissal, coming as it does just days before VMworld in Vegas next week where the company is expecting a record 14,000 people.

EMC would reportedly have liked to keep him around, but let's be practical - what were the odds? Such a consideration didn't stop VMware's parent company from removing his wife as CEO on July 7 - reportedly for failing to meet sales expectations by a country mile and for failing to keep costs in line - not, as is popularly believed, for agitating for EMC to spin off the rest of VMware.

Rumor has it that EMC offered Greene a different post but she opted to vacate the premises. The New York Times claims EMC CEO Joe Tucci - which whom Greene reportedly had a contentious relationship - offered Rosenblum Greene's board seat when he fired her and Rosenblum declined. We couldn't find anybody at EMC to confirm that. If true, it's not common knowledge.

Evidently the Times got the tidbit from Team Greene, which leaves the company twice blessed: first by a reportedly tidy chunk of the $635 million in cash EMC paid for VMware in 2004 and second by VMware's brilliant IPO last year although Greene complained to Fortune about the number of stock options granted.

Greene's ouster further destabilized VMware's stock price, which briefly hit a high of $125 last October and started sinking when the market realized the virtualization leader would have serious competition from the Microsoft death machine as well as Sun, Citrix, Oracle and Red Hat to name a few.

It is now in the low 30s, roughly 20 bucks short of where it closed the day it went public 13 months ago, down ~40% just since Greene was thrown out, literally billions in market cap destroyed.

Greene's departure also apparently cost the company Richard Sarwal, its EVP of R&D, and Paul Chan, its VP of product development, both of whom have resigned.

© 2008 SYS-CON Media Inc.