Executives of the Round Table

The news of top executive role shifts at EMC & VMware and the accompanying rumors of a new cloud-oriented spinoff  have certainly spiced up the summer. One thing is abundantly clear – EMC and VMware should be thought of as the same corporate entity and there is no point in pretending otherwise. It is also clear that the cloud is the irresistible force in this story.  The new roles for both Mr. Gelsinger and Mr. Maritz were described in the context of cloud:

 ”Pat will now lead Cloud Infrastructure at VMware, and Paul will look across our technology strategy with a particular focus on Big Data and the next generation of cloud-oriented applications that will be built on top of these fundations.”

 It doesn’t really matter what VMware’s legal structure is, it operates as a part of EMC. The swapping of logos on Gelsinger’s and Maritz’ business cards is powerful evidence. The two companies are co-managed and will continue to be co-managed and cross-pollinated for many years. Employees moving up the ranks of either company will see their opportunities coming from both companies, which will make it easier for them to retain top talent. M&A activity will continue to be done by both companies, with the eventual determination of which company will be the final owner of the technology to be decided later.  The ability for EMC/VMware to acquire and develop technologies in different ways and in parallel could turn out to be a huge advantage for successful technology and corporate integration.

It’s also clear that EMC is not really a storage company anymore, it is a data infrastructure company that designs and sells both hardware and software.  The EMC brand implies a storage focus, while the VMware brand implies a compute focus.  Together they are twin gorillas of infrastructure that will drive their business results independently. They seem to have found an optimal way to manage through the market swings that inevitably come with a paradigm shift. It certainly wasn’t part of the plan when they bought VMware but it certainly looks like genius today.

The rumored spinout of a new company to address platform opportunities with Cloud Foundry and Greenplum will be interesting to watch. Some think  Mr. Maritz will be named to run the company because the job description for Maritz specifically mentioned Big Data and cloud-oriented applications. But I’m not so sure. His tenure at VMware was immensely successful. He vastly expanded the opportunities for VMware by creating a platform software business that meshes perfectly with EMC’s core business. I suspect the company will reward him by placing him in an over-arching strategic planning role for the entire EMC universe, something he is uniquely suited for, as opposed to building a new spinout from the ground floor.  There are other operations-oriented execs in the company who can do that. Why wouldn’t EMC/VMware want to show off more of their talent pool?  And with that thought, seeing as how so many things have changed at EMC over the last decade, you might think they might elevate somebody that isn’t a Caucasian male. That would be a switch.

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