KEY POINTS:
On the face of it, Paul Maritz seems to be three months into one of the global IT industry's jobs from hell.
He stepped in to become chief executive of former market darling VMware at the darkest time in the company's history.
Eleven months after VMware pulled off
the most successful share float since Google, a boardroom bust-up saw Maritz's popular predecessor unceremoniously ejected from the company in July with several key senior executives following her out the door.
The company's share price has been in free fall and its previously unique products are now being duplicated by a number of competitors, not least Microsoft.
Despite all this, Maritz exuded an air of intellectual calm this week in Sydney, where he spoke to Connect ahead of a keynote address in the city yesterday to a company event which pulled in more than 1000 of VMware's corporate customers.
His response to the fact that the company's super-trendy "virtualisation" business technology has proven so popular it has generated an industry of imitators?
"The price of success is always that you attract competition and that means, as with any technology business, you can't afford to stand still," he says.
"Others are catching up to us but we're not standing still. It's our intent to move ahead and we're really about a much broader company now than one piece of software."
That piece of software at the heart of VMware's early success is something called a hypervisor, a platform for allowing multiple operating systems to run on a single computer at the same time. The "virtualised" computing environment this enables is attractive to businesses because it means they can make much better use of their IT resources.
Where traditionally an individual server in a corporate data centre could run only one operating system or software application, meaning it typically performed at about 10 or 15 per cent of its capacity, using virtualisation each machine can be used at near full capacity, leading to huge savings in resources and power use.
The attractiveness of the virtualisation market has seen other vendors, including Microsoft, jump in for a slice of the action.
Timothy Stammers, an analyst with IT research firm Ovum, noted last month: "Microsoft clearly intends to use all of its massive marketing muscle in its attempt to gain control of this critical market."
VMware's success in commercialising virtualisation led to a run of triple-digit annual sales growth and a spectacular IPO last year. Its shares floated at US$29 ($47) and spiked to US$124. But as growth has levelled back to double-digit rates, and with the internal ructions, increased competition and the global economic crisis, the share price has slumped to around US$24.
"Most customers would give their eye teeth to be in our situation - being a highly profitable, US$1.5 billion-plus company still growing at a very respectable rate," says Maritz.
"We came down off irrationally high expectations and we're living with the consequences of that, but I think that's a short-term issue. Right now all of the technology industry is much more affected by what's happening in the broader marketplace than by anything we do or don't do, so we're all corks bobbing on the ocean."
He says the company is "incredibly financially stable" with over US$1 billion in the bank and is majority owned by three IT industry heavyweights: EMC, Intel and Cisco "so we're well positioned to weather the storm".
And while the international credit crisis means companies are nervously slashing spending plans in all areas, including IT, Maritz does not see that as a problem for VMware.
"If you look at reviews of what people expect to be spending money on, virtualisation is right at the top of the list, so we're speaking to a fundamental need our customers have," he says.
"We're fundamentally all about allowing our customers to do more with less and we think in this current economic cycle that will only be further emphasised."
If anyone has the intellect and background to lead VMware through these challenging times it is Maritz. He spent 14 years working for Microsoft, rising to become vice-president of the Platform Strategy and Developer Group, where he oversaw the development and marketing of key products including Windows 95, NT and 2000, Visual Studio, SQL Server, Office and Exchange. As a member of Microsoft's elite five-person "executive committee" he was arguably the company's third most powerful manager behind founder Bill Gates and current CEO Steve Ballmer.
As competition in the virtualisation market heats up, Maritz has spent his early days at VMware working on the company's technology roadmap in a bid to ensure it maintains its leadership position in the market.
His vision for the company involves some bold plans to expand the virtualisation concept, including what the company calls the virtual data centre operating system.
Continuing to tap into the "green IT" trend is another part of the strategy. Because virtualisation allows organisations to reduce the sprawl of physical equipment and cut power, it is an attractive carbon footprint-reducing initiative. "Every major organisation in the world is going to be under a mandate in the coming years to be more efficient for environmental purposes and once again virtualisation speaks directly to that capability," Maritz says.
He cites a statistic he recently read that turning off one server is equivalent to taking one and a half cars off the road.
"That's a big and meaningful step we can take when you consider the world has tens of millions of servers out there.
"If we can take that down by a few million, that's equivalent to taking a few million cars off the road."
Is there a degree of irony in the fact that VMware is an IT company focused on reducing the amount of money its customers spend on technology? Maritz doesn't think so.
"The IT industry is fundamentally about selling capability. It's about selling the tools that enable businesses to achieve a particular end," he says.
"Historically we've been very focused on looking at that from a device perspective. One of the big shifts the industry is going through is from looking at the world through the lens of particular devices - whether they be laptops, servers, or whatever - to instead looking at this in terms of information and capabilities.
"Increasingly we as an industry are going to have to learn how to get our money from capabilities rather than selling particular pieces of metal."
PAUL MARITZ'S CV
* Born and raised in Rhodesia (now Zimbabwe), graduated in mathematics and computer science from the Universities of Cape Town and Natal in South Africa.
* 1986 to 2000 - Worked for Microsoft, rising to become a member of the top-tier executive committee.
* 2003 - Founded technology start-up Pi, acquired by EMC in 2008.
* Feb. to July 2008 - President of EMC's Cloud Infrastructure and Services Division.
* July 2008 to present - President and CEO for VMware, majority owned by EMC. Virtual man happy to deal with reality
* Simon Hendery travelled to Sydney as a guest of VMware.
