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Gelsinger to take over as VMware CEO

But don't count out the ol' Intel hand as eventual EMC CEO

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The rumor mill was churning out chatter about succession changes at EMC and its virtualization minion, VMware, and this forced EMC's and VMware's hand and made them make their executive change announcements a week ahead of schedule.

As expected, Pat Gelsinger, who is 51 years old and who for many years had run Intel's Xeon and Itanium server processor business (called the Digital Enterprise Group at the time), is going to be CEO of VMware, which is majority-owned by EMC and will almost certainly stay that way.

Gelsinger spent 30 years at Intel and came to EMC in 2009 as president and chief operating officer of EMC's Information Infrastructure Products. This is the part of EMC that is doing storage, big data, and server-related products as well as trying to put server functions inside of EMC storage arrays.

Gelsinger takes over at VMware on September 1, and replaces Paul Maritz, a high-level ex-Microsoftie who took the helm from VMware co-founder Diane Greene in July 2008, and who not only steered VMware through the Great Recession but also managed to move VMware from server virtualization to clouds, and set it on the path to what VMware is calling the "software defined data center."

Contrary to some of the rumors going around, Maritz, who is 57, is not leaving EMC and is not being put in some sort of penalty box. Rather, as he explained on a conference call with Wall Street analysts on Tuesday afternoon after the market closed, Maritz approached the EMC board last year when talk of succession after EMC CEO and chairman Joe Tucci eventually retires was going around.

This time last year, Tucci came out and said that he would step down as CEO by the end of 2012, and that Maritz, Gelsinger, EMC's cloud COO Howard Elias, and CFO David Golden were all possible shoe-filling candidates.

As it turns out, Tucci managed to give everyone an upgrade, and give three executives new responsibilities while at the same time keeping them in the EMC family – and without relinquishing his role as CEO, which he will keep until at least 2013.

"It gives a lot of people a lot of different experience," Tucci said on the call.

Gelsinger, who has never been a CEO before and who was in line to be the next CEO at Chipzilla, gets to be CEO at VMware, the $4.5bn-plus server virtualization juggernaut that is trying to expand into infrastructure and platform clouds as well as PC virtualization and other services.

Maritz will take over as chief strategy officer and will be driving mergers and acquisitions strategy as well as coordinating the technologies of the various EMC units that span document processing, big data munching, backup, security, and – of course – server virtualization and storage software of all kinds.

With Gelsinger's background in physical servers and in running the server biz at Intel – which has grown to around $10bn a year – giving him the CEO job that he has no doubt coveted for a long time is a smart move.

Doing so leaves others at EMC in contention for that CEO job there – but so is Gelsinger. He certainly has not been taken out of the running, and in fact, you might think about this as a dry run for taking the helm of EMC overall someday. Gelsinger is young enough to run VMware until Tucci retires, maybe in 2013 or 2014 – he said his health is good and he is sticking around as long as the EMC board wants him to – and then take over. Being cross-trained in the storage business for three years was a good EMC foundation.

Don't expect any big changes to VMware in the short term.

"Obviously, the day-one task is to perform a smooth transition," explained Gelsinger. "The VMware team is performing well, but any change creates questions, and we have to answer them."

The basic gist is to expand out from server virtualization and some management tools into a more complete set of management and automation tools to create that automagic software-defined data center that VMware CTO Steve Herrod has been talking about.

That said, Maritz – who is still running VMware and as chief strategy officer – will have a say in what VMware does and doesn't develop or acquire. He realizes that VMware can't just look at its navel and operate in VMware-only world.

"We are not arrogant enough to believe that we will be the only infrastructure provider in the world," Maritz said, and that was one of the reasons why the company just acquired DynamicOps to weave its cross-platform cloud management tools, which speak VMware's ESXi as well as KVM, Hyper-V, and Xen. And maybe whatever materializes on ARM-based servers.

As far as the talk of a spinout of Cloud Foundry and Greenplum Hadoop and data warehouse software goes, this seems to have been a lot of speculation. Tucci said that Maritz would be a "good carpenter" and "measure, measure, measure," and that any talk of cutting was premature. For now, the current configurations of software inside of VMware and EMC are going to remain the same.

Gelsinger moved to the Boston area to take the job at EMC and says that he will get a second house in Palo Alto and live bicoastally, and flitting back and forth and around the globe as necessary. Maritz will not be moving back East, but will similarly be traveling a lot and using technology – that is what it is supposed to be for – in lieu of traveling when possible.

Back in April, CFO and co-president of operations Mark Peek decided to go off to work at Workday, the SaaS software startup created by PeopleSoft founder Dave Duffield, and that started the musical chairs at VMware. (Maritz said his talks with the EMC and VMware boards about who should be running what had been started well before then.)

Carl Eschenbach, who was co-president along with Peek and in charge of customer operations, was given the COO title and was given a co-president position beside Tod Nielsen, who heads up application platforms. It looks as if Eschenbach might be next in line to run VMware – particularly if Gelsinger moves up to the CEO job at EMC in a few years. ®

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