Update:  Here is what I’ve confirmed so far:  1) Maritz was not ousted as CEO and this was his decision according to sources close to Maritz, and 2) Maritz will not be the CEO of any spin out.

The story is now breaking that Paul Maritz is stepping down as CEO of VMware and Pat Gelsinger might be taking over for him.  I have been tracking the story for months and there is more going on then people know.

We have been following Pat Gelsinger moving over as CEO for over three months now and we have confirmed through our sources that this has been in the works for some time.  I will put out a separate post on those emerging details.

Here is what I’ve confirmed so far:  1) Maritz was not ousted this was his decision according to sources close to Maritz, and 2) Maritz will not be the CEO of any spin out.

I asked Pat Gelsinger when I sat down with him at EMC World 2012 what would he do if he were the CEO of VMware.  Here is his answer.

Video of Pat on VMware:  http://www.youtube.com/siliconangle

According to reports from GigaOm, VMware was considering spinning out the Cloud Foundry business as a separate company combined with EMC’s Greenplum and Project Rubicon efforts.  Paul Maritz is being talked about at the possible CEO of Cloud Foundry which was launched as an open source platform-as-a-service that was developed at VMware.

I doubt that will happen.  According to my sources, Maritz will not be taking that role if it Cloud Foundry does spin out.

Maritz is well know and beloved leader in the geek community and came to EMC (then VMware) by acqusition from his startup, Pi, which EMC acquired in 2008. Before his startup Maritz was a central figure at Microsoft 1986 to 2000 where he ran the Platforms and Developer Group.  Martiz was a key executive for Bill Gates and a big figure in the DOJ investigation around Microsoft killing Netscape.

Full Interview with Pat Gelsinger at EMC World on SiliconANGLE.tv

I’ve had a chance to sit down with Pat Gelsinger many times over the past three years at EMC on SiliconANGLE.tv.  Pat is a superb executive who is aggressive.  If he does indeed go to VMware I expect bold product moves to solidify VMware as the leader in cloud.

Ben Kepes, CEO & founder of Diversity Limited analyst firm covering VMware, posts his views on what needs to get done.  

What VMware should do

So what’s a CEO to do? Here’s my plan for the VMware business(es);

Ditch the niche applications 

Sliderocket is a great product, but it’s completely disconnected from everything else VMware does. Zimbra is similarly an outlier. Socialcast could be a useful tool to create a social fabric across the other VMware product catalogue but at this stage it’s yet another silo off to the side. My advice is to flick off Sliderocket and Zimbra, and make an assessment on whether Socialcast can be folded in as a fabric quickly and easily. If a “black ops” team could do what is necessary on Socialcast in say, a couple of months then do so, otherwise give Socialcast the flick also. It will be hard to admit the acquisitions were unwise, but better a quick dose of pain than long term confusion
Understand that the future is heterogeneity

the DynamicOps acquisition speaks to this realization within VMware, but the company needs to double down on a mixed view of the cloud.

Create a standalone entity that is focused on cloud infrastructure – include DynamicOps in with this and direct the existing infrastructure business to “play nicely” with the new unit. The new business “VMCloud?” can be a stellar vendor of public and private cloud technologies and the DynamicOps inclusion can mean that the products have a compelling story when seen alongside customer use of existing VMware products and services. In doing so VMware disrupts the IT management and service provision space before other players (BMC anyone?) are able to do so themselves
If VMCloud won’t fly, do a Microsoft

Microsoft has signaled it is finally going to play a compelling game in the hybrid cloud space. I’m predicting an expansion of the “private Azure” play well beyond service providers. If VMware decides that it wants to keep all of its infrastructure business together, then it has to do the right thing and forego some short term hyper-profit for long term stability. Provide DynamicOps to customers as an accessible and open turnkey solution to bringing together all their assets (physical, virtual, public and private) under one pane of glass and make sure that they incentivize their salespeople to effect the move – it’s going to be hard but some kind of quota system that mandate lower margin but longer term cloud sales is going to be necessary
Let PaaS shine

The biggest barrier to CloudFoundry hitting it out of the park (beyond customer confusion about what PaaS actually is of course) is the uncertainty around VMware’s intentions. But by spinning off CloudFoundry alongside IaaS plays, this confusion is replaced by a stack-level confusion. While I realize AWS is successfully moving from IaaS to PaaS while still articulating a compelling story, VMware has the added confusion from the fact that CloudFoundry is an open source product. My advice is to let CloudFoundry be its own business unit, and bolster the platform by the addition of some smart management tools (thing DynamicOps for PaaS). Obviously I’m bullish about this particular area since I’m an investor in PaaS management and marketplace vendor Appsecute (see disclosure page). I would say that the reaosn for my investment in the company stems directly from the fact that it’s a very necessary addition to the PaaS stable – and as such something of a no-brainer

Summary

VMware is a big, established company. But not so big and established that it can’t innovate quickly. The key challenge is being prepared to forego short term revenue for longer term stability and sustainability. The entire organization needs to see that they’re standing on a platform that, while possibly not burning, is at least smoldering slowly. The rate of change is increasing all the time and VMware risks being left irrelevant by changes that a bearing down on it. Innovate or die!

This story will be the hot topic leading up to VMworld 2012 in SF next month. SiliconANGLE will bring the CUBE this year for the third straight year. More details on SiliconANGLE at VMworld 2012. We are awaiting details from VMware on location.

The tech enterprise business is rocking.