Silicon Valley CEO Shakeup

By Robert Gelber

July 17, 2012

Corporate shakeups at VMware and Yahoo have resulted in a new pair of tech CEOs. EMC Corp’s Pat Gelsinger is replacing Paul Maritz as the CEO of VMware and longtime Google hotshot Marissa Mayer takes top office at Yahoo. Both companies have the potential to change their cloud strategy.

VMware’s Executive Shuffle

GigaOm reported yesterday that a CEO change at VMware was imminent. While company officials declined to officially comment, the publication surmised the switch was made because of losses to VMware’s core business. During his tenure, Maritz pushed the company to pursue enterprise applications and high-level software.

The story checked out today when VMware’s parent company EMC announced that Pat Gelsinger would be taking the helm at VMware. The news item also confirmed reports that Paul Maritz was moving over to EMC as chief strategist, although he will remain on the VMware Board of Directors. EMC Chief Financial Officer David Goulden will fill Gelsinger’s vacated position as EMC’s president and chief operating officer. According to the speculation mill, any one of these execs could become the next EMC CEO when current head honcho Joe Tucci steps down.

In another article published yesterday, it was rumored that the virtualization giant hopes to spin a number of cloud assets into a separate company. The new entity would consist of

  • Cloud Foundry – a PaaS offering from VMWare

  • Greenplum + Chorus – EMC’s big data division and analytics software

  • Project Rubicon – A joint venture between EMC and VMware

While the report is still unconfirmed, it is rather detailed. If the new business pans out, it would have the components to offer a soup-to-nuts cloud computing service. This would also mean that VMware could reestablish focus on its core hypervisor business.

Yahoo Nabs Google Exec

Today Marissa Mayer, Google’s 20th employee, starts her role as CEO of Yahoo. USA Today covered the new CEO’s credentials. She was Google’s first female engineer and worked on the user experience of Google’s search, mail, images and news applications. Towards the end of her tenure at Google, she oversaw the company’s location and local services. This meant working with more than 1,000 product managers.

Mayer is heading to a company that has been through some rough patches over the past five years. In 2008, it turned down a buyout bid from Microsoft at $33 per share. Today, the company’s shares are roughly half that amount. The big announcement pushed the stock up briefly. This morning, Yahoo stock opened at $15.85, an increase of $0.20, or 1.3 percent, from Monday’s closing price, but later in the day the stock fell again, likely in response to a speech given by Federal Reserve chief Ben Bernanke to Congress about the economy.

Yahoo has also had trouble retaining leadership. Mayer will be their fifth CEO in five years. Peter Shankman, an independent strategist, said of the move: “This is a Hail Mary pass.”

It’s not all bad news for the company, though. According to Alexa Web analytics, Yahoo receives more than 700 million unique views each month, putting it only behind Google, Facebook and YouTube. The Web giant might even be a contender on the cloud front.

Beyond its sizable infrastructure, Yahoo has helped develop some very popular open source technologies. They created Hadoop, which is now synonymous with big data, and contribute to the OpenStack project. If Mayer wanted to, she could give Amazon, Google and the other cloud players a run for their money.

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