Yesterday's surprise announcement by EMC's board that it has dismissed VMware CEO Diane Greene, that company's primary mover and shaker since its founding a decade ago, is likely the best hope VMware has of surviving the inevitable Microsoft onslaught.
Sure, the move was abrupt and completely lacking in class or grace -- and the suggestion was made that it was 'punishment' for upcoming bad quarterly numbers. This charge amounts to just smoke and mirrors, to be sure, and Ms. Greene, who has done more to get virtualization a place in the corporate tech lineup than just about anyone else, certainly deserved a nobler parting.
But leaving aside the manner in which it was done, I can't really fault the EMC board for its decision. In fact, replacing Ms. Greene with Paul Maritz, a Microsoft alumnus, might be the best move VMware has made outside of the pure technology realm in quite some time.
Microsoft has been talking about its virtualization technology publicly since at least 2005. Granted, the software behemoth has changed virtualization paths several times, and I guess if I were at VMware I wouldn't have been too worried for a while, either, given how long it's taken Microsoft to get its act together in this arena.
It's now officially time to worry. Microsoft's free-of-charge, would-be VMware-buster, Hyper-V, is finally available. By most independent accounts and reviews I've seen, it is 'good enough.' That means that except for possibly the largest shops with the most mission-critical apps, just about everyone else will find Hyper-V dandy for most uses.
And even for those huge customers, it's only a matter of time before Microsoft catches up. It usually does. So VMware has, tops, 18 months to continue innovating and to get its pricing to a more sustainable level for the long term and to communicate its direction to its large and -- until now, at least -- loyal user base.
Not to put too much of a point on the price issue, because if pricing were the most important factor, Xen or some other open-source software would have won the war years ago. Virtualization is a complex and far-ranging technology that, most of all, needs to work well and reliably with a shop's existing software -- that's far more important than the price tag. This is where I differ from my colleague, Steven J. Vaughan-Nichols, who contends that it's a done deal that open-source virtualization will seize the market and kill VMware. If VMware does fall, don't believe it will happen anytime soon; there's already too much of a huge installed base and switching virtualization horses is not a trivial exercise.
That said, I'm certainly not betting the company will continue to survive, no less lead the market. If it does either, it will have to act quickly, and it has a lot of work to do. Thus far, VMware's response to Hyper-V has been to say, 'But ours is better.' And even if that is true, the question becomes: So what? If I can implement and manage Hyper-V for a fraction of the price of VMware's vaunted ecosystem -- and Hyper-V does most or all of what I need it to do -- VMware's claims of superior tech don't much matter outside of a Fortune 100 company or the philosophy classroom.
Even in an interview as recent as June 27, Ms. Greene appeared the paragon of calmness when discussing the threat posed by Hyper-V. She contended that VMware has already changed its pricing structure, has better technology including Vmotion and has pretty much done everything else needed to counter Microsoft.
Wrong answer, Ms. Greene. And apparently the EMC board disagreed with this approach, too. The coach has been fired, a new one hired and there are only a few innings left before the game is over. Best come out swinging, and soon, Mr. Maritz.