VMware Calls Cloud Foundry, Greenplum Spin-Off Rumor 'Unfounded'

VMware is seeking to squash recent speculation about a spin-off of its Cloud Foundry platform-as-a-service and big data assets from EMC Greenplum, calling the rumors "unfounded."

In an internal memo Tuesday, VMware instructed its corps of global spokespeople to address questions about the rumored spin-offs by answering that the company remains committed to those assets.

"The speculation about EMC and VMware’s commitment to Cloud Foundry and Greenplum businesses are unfounded," VMware said in the memo to its global spokespeople, which was obtained by CRN. "VMware and EMC are very committed to these efforts and are continuing to aggressively invest in their success and long term contribution to the portfolio."

[Related: VMware Blockbuster: Maritz Out As CEO After Four-Year Tenure ]

The memo, titled "Executive Change Announcement: July 17, 2012," outlines answers VMware's global spokespeople should provide to several anticipated "top public questions" related to this week's executive changes, first reported by CRN Monday, in which EMC's Pat Gelsinger was named as VMware's new CEO, replacing Paul Maritz.

VMware didn't respond Tuesday to a request for comment on the memo. VMware has not commented previously on the spin-off reports, citing its policy of not responding to rumors or speculation.

News of the planned spin-off was first reported Monday by GigaOm, which cited "sources close to the deal." In addition to Cloud Foundry and EMC Greenplum, the spin-off is also supposed to include Project Rubicon, EMC and VMware's infrastructure-as-a-service joint venture, according to the GigaOm report.

Unveiled last April, Cloud Foundry lets developers rewrite apps in Java so that they'll run well on private clouds. It works with a variety of development frameworks, including .NET, Ruby, Node.js and Spring, the last of which VMware picked up in its August 2009 acquisition of SpringSource.

Last November, Hewlett-Packard was reportedly running its HP Cloud Services private beta on Cloud Foundry.

NEXT: Partners Say Spin-Off Wouldn't Make Sense

Cloud Foundry and EMC Greenplum are two key pieces of the application stack, and separating them wouldn't make sense for the mission of either company, one partner of both VMware and EMC told CRN.

"VMware knows it has to get higher up in the application space. Spinning out Cloud Foundry would complicate things by having it in a third party. I think it would be challenged," said the source, who requested anonymity to protect his relationship with the vendors.

Jamie Shepard, executive vice president of technology solutions at ICI, a Marlborough, Mass.-based partner of both EMC and VMware, said keeping Cloud Foundry and EMC Greenplum in-house is the right move.

"This would fit with our strategy of providing customers with virtual service catalog," he said. "Along with vCloud Director and Horizon, this plays well with the overall phased approach to cloud enablement and big data analytics in the cloud."

VMware is positioning Cloud Foundry as the "Linux of the cloud," in that it gives developers freedom to build apps using whichever tools they prefer, which eliminates the risk of getting "locked" into a particular platform. VMware also offers a desktop version of its platform-as-a-service called Micro Cloud Foundry.

EMC acquired data warehousing vendor Greenplum in 2010 and has used it as the basis for its big data portfolio. That deal has been challenging for EMC, the source told CRN.

"Greenplum is a different target customer than EMC is used to dealing with," said the source. "Greenplum is not something they sell to typical storage organizations or teams within an enterprise, but to the applications and analytics team."

But despite the challenges, a spin-off at this point in time wouldn't make sense for EMC, the source said. "I don't think EMC wants to give up on Greenplum and spin it out," he said. "In fact, Greenplum is one piece of the EMC portfolio the company is over-investing in right now proportionate to the revenue it is bringing in."

Meanwhile, VMware also says in the memo that the decision to replace Maritz with Gelsinger as CEO "was given considerable thought and analysis." VMware also "worked with an external search firm to explore and evaluate all potential candidates before making a final decision," according to the memo.

Gelsinger will take over as CEO of VMware on Sept. 1, with Maritz moving over to EMC to take the newly created role of chief strategist.

Maritz, who was previously rumored to be in line to lead the Cloud Foundry-Greenplum spin-off, according to TechCrunch, is scheduled to deliver the opening keynote at VMworld, which is being held in San Francisco from August 27-31.

Gelsinger will "participate in a select portion" of VMworld, according to the VMware memo.

NEXT: VMware's Internal Memo To Spokespeople

Following is the VMware memo in its entirety:

Executive Change Announcement: July 17, 2012
Public/Employee FINAL
Top public questions for global use by spokespersons

Q. What is VMware announcing today?

VMware today, July 17, 2012, announced that Paul Maritz will be succeeded in the post as Chief Executive Officer of VMware, effective September 1, 2012, by Pat Gelsinger, currently president and chief operating officer, EMC Information Infrastructure Products. Paul will remain a board member of VMware, and will take on a new chief strategist role at EMC. Pat will also be named to VMware’s Board of Directors, effective September 1, 2012.

Q. Why is the CEO transition taking place now?

It is the right time to do this given Paul Maritz’s four year successful tenure with VMware and his desire to focus on strategy and technology direction foremost. Paul, along with his team has achieved tremendous financial success, leading VMware from a $1B company to a $4B company over the past four years. He leaves the CEO role with VMware in a healthy financial position as well as on a trajectory for growth and growing strategic importance with customers.

Q. What are Paul Maritz’s plans moving forward?

Paul is preparing for VMworld (August 27-August 30, 2012) where he will deliver the Day 1 keynote to 20,000 customers, partners and industry influencers. Following the formal CEO transition period through September 1, 2012, he will remain on the VMware Board of Directors and also join the staff of Joe Tucci, EMC CEO as Chief Strategist.

Q. Why was Pat Gelsinger chosen as Maritz’s successor?

Having spent 30 years at Intel before joining EMC, Pat has unique expertise in the x86 architecture and ecosystem underpinning the vast majority of virtualized environments today, which is broadly recognized as the foundation for Cloud Computing. Pat, with his deep passion for technology and track record, will complement the strong management team that is already in place at VMware, recently strengthened by the promotion of Carl Eschenbach to Chief Operating Officer.

Q. Does this transition signal a change in VMware strategy?

VMware’s business and technology strategy remains unchanged as the company stays focused on helping customers transform IT.

Q. Is there any change in philosophy regarding the relationship between VMware and EMC?

EMC and VMware have a very close relationship given the ownership position EMC has, and the board composition. That said, ever since EMC acquired VMware it has been allowed to operate independently and work closely with many ecosystem partners that often compete with EMC. Nothing will change in this regard.

Q. Do we expect these executive changes to impact our strategic partnerships?

No, we recognize the importance of our strong partner ecosystem as a mission-critical route to market for our customers.

Q. When will Pat Gelsinger begin to discuss his plans, strategy and approach publicly?

Pat Gelsinger will participate in a select portion of the VMworld program (August 27-31) and then begin broader external communication after Sept. 1, 2012.

Q. Is the spin-out rumor regarding Cloud Foundry accurate?

The speculation about EMC and VMware’s commitment to Cloud Foundry and GreenPlum businesses are unfounded. VMware and EMC are very committed to these efforts and are continuing to aggressively invest in their success and long term contribution to the portfolio.

Q. Did the VMware Board of Directors conduct a search for a new CEO or consider other candidates?

The selection of Pat Gelsinger was given considerable thought and analysis. We also worked with an external search firm to explore and evaluate all potential candidates before making a final decision. We believe Pat is the best possible candidate for VMware and an excellent successor to Paul Maritz.

Q. What is the plan for filling the vacant VMware CFO position?

We continue our process in searching for the best candidate and will provide more information to the public when we have an update.

PUBLISHED JULY 18, 2012