Although it's fun to pretend that this is all technology and clever ideas we're regularly reminded of the human element, never more so than with the abrupt departure of Diane Greene from VMware last week. The calmer of our informants point out that in the end this is probably good for VMware since Paul Maritz is an experienced large-company software executive and one who knows Microsoft particularly well. That truth not withstanding if VMware wanted to wish Microsoft well on the availability of Hyper-V (formally released 26 June) it's hard to imagine what they could have done better than the self inflicted chaos from last week. VMware is clearly the incumbent in virtualization and on balance had done most things right. Nothing like replacing the founder and CEO with an outsider, and the resulting $5B stock market haircut that created speculation on what might be wrong internally. VMware certainly has real business challenges with Microsoft's entry starting with the disruptive $28 price of Hyper-V. In the same sense that Intel regularly sucks all the oxygen out of AMD's lungs with affordable (for Intel) disruptive pricing, Microsoft has the same opportunity with VMware and if VMware isn't worried about it, they should be. Although VMware has a real lead in terms of technical and feature parity there are a lot of virtualization cases where $28 and an enterprise license agreement with Microsoft may trump. But as we said, facts and reality notwithstanding, VMware has certainly armed the Microsoft sales force with a basketful of lines to start a productive discussion with a VMware customer. It will be sad if in the end what is almost certainly a very human squabble ends up being a material part of how the market sorts out (but it certainly won't be the first time). A tip of the hat to Diane Green -- she may have reached the end of her big company rope but she should certainly be proud of her part in building VMware to what it is today (or what it was two weeks ago I guess).
