Storage Soup

Jul 17 2012   4:35PM GMT

What does VMware CEO shuffle mean for EMC’s succession plans?

Dave Raffo Dave Raffo Profile: Dave Raffo

News that Pat Gelsinger will move into the VMware CEO job and his predecessor Paul Maritz will join EMC as chief strategist has EMC-watchers wondering what the changes will mean to the storage giant’s succession plans.

Gelsinger and EMC CFO David Goulden were considered the top candidates to replace Joe Tucci when he steps down as CEO. The moves that EMC made today included a promotion for Goulden, who adds COO and president to his CFO titles. EMC also kept Gelsinger in the family, because EMC is the majority owner of VMware.

Tucci already changed the timing of his retirement last January when he said he would stay on past the end of this year into 2013. During a conference call today to discuss the executive changes, Tucci said he would stick around for at least 17 more months.

“I am incredibly energized,” Tucci said. “I truly love EMC and VMware. I do believe I add value, and I am fully committed to staying on as chairman of EMC and VMware and CEO of EMC at least through the end of 2013. I am convinced my successor will come from within.”

Goulden becomes the clear No. 2 to Tucci in his new role. Goulden will remain CFO while also heading EMC’s business units, sales, customer operations, services and marketing.

But that doesn’t mean Goulden is a lock to become the next CEO. EMC can still bring back Gelsinger, who will have more than a year as CEO under his belt by then. Maritz, who remains on the VMware board and will help drive EMC’s “big data” strategy, also has to be considered a candidate. EMC has other well respected executives. High-ranking executives Howard Elias and Jeremy Burton have been given more responsibilities to help replace Gelsinger, and Bill Scannell was promoted to president of global sales and customer operations last week.

When asked if he would stay on beyond 2013, Tucci said: “I will not overextend my welcome by any means. As long as I’m providing value and the board wants me … I’m not putting any firm end date in the sand. Now key executives are getting increased experience. Dave Goulden hasn’t been a COO of a company of this size, and Pat hasn’t been a CEO.”

The executive changes take effect Sept. 1, days after VMWorld 2012 ends.

“It will be an honor to take the baton from Paul at VMworld for the next lap of the journey,” Gelsinger said.

Gelsinger joined EMC in 2009 after spending 30 years at Intel. He led EMC’s product strategy as president and chief operating officer of EMC information infrastructure products.

Maritz served as VMware CEO since 2008, when he replaced VMware founder Diane Green more than four years after EMC acquired VMware. Maritz described his new role as a full-time position, but said he would remain on the west coast rather than move nearer to Hopkinton, Mass.

Tucci said Maritz suggested turning over the VMware reigns to Gelsinger as both vendors prepare for a major IT transition to cloud computing. Tucci said the timing was good because both EMC and VMware have been doing well. He said he believed customers will be happy with the changes.

“The time to make these kinds of changes is off the position of strength when you are performing well and have customer permission to play in new markets,” he said. “VMware is moving to the next phase of cloud computing.”

The executive swapping also can be taken as a sign that EMC is considering spinning VMware back in instead of running it as a separate company. The way Tucci and the EMC board move execs back and forth suggests they already see VMware more as a division of EMC rather than an independent company.

 

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