ComputerWorld covers VMware’s new president, Paul Maritz, conference call to financial analysts.

VMware's new CEO says he knows Microsoft and can defeat it

Paul Maritz, a former top MS exec, says he is ready to take the big dog on

July 22, 2008 (Computerworld) VMware Inc.'s new CEO and president, Paul Maritz, took aim at his chief rival today -- Microsoft Corp. -- and told financial analysts that he knows how to beat that company, and that includes giving products away.

"The key when it comes to Microsoft is to neither rest on your laurels, nor get mesmerized," Maritz said.

Another key strategy in beating Microsoft, apparently, is to play offense. And that's what Maritz did on Tuesday, announcing during a conference call with financial analysts his intention to start giving away VMware's ESXi server. That software is roughly equivalent to Microsoft's just released Hyper-V virtualization server, which lists for $28 per server.

VMware will "take the price on that product to zero" in its next update, said Maritz. ESXi had listed for $495 but is offered for much lower prices by third-party server vendors that include the product in their own wares. VMware officials said after the call that the new release would be out in about a week.

As I mentioned in my own post on July 8, Paul Maritz is a force Microsoft will reckon with and he knows how to compete.

Paul was one of the best Microsoft VPs I enjoyed working with, and I believe he'll be able to take VMware to a new possibility of cloud computing and virtualization.

The ComputerWorld article continues.

The contrast between Maritz and recently ousted VMware co-founder and CEO Diane Greene was interesting, and it quite possibly gives a sense of the company's strategy going forward.

Greene rarely said anything publicly that could be interpreted as confrontational with Microsoft, even though she knew that the software giant was taking direct aim at her company. VMware, particularly in its earlier years, wanted a strong relationship with Microsoft as it built its x86 virtualization platform, and so Greene would often position her company as a partner of sorts.

That era of niceness may be ending with Maritz.

Maritz today made a point of telling analysts on the call something they no doubt already knew -- that he is a former Microsoft employee. "I know that Microsoft is a formidable but not invincible competitor," he said.

And Maritz knows firsthand just how powerful Microsoft can be. Microsoft, thanks to its free browser and operating system market strength, crushed Netscape; Maritz was one of the leading Microsoft executives to testify for the company in that antitrust battle with the U.S. government 10 years ago. The question is whether that deep knowledge will give Maritz the competitive edge he will likely need to keep Microsoft from repeating history.

"I know that Microsoft can afford to play a long waiting game, but I also know from firsthand experience that where a competitor has a lead and that a competitor invests and innovates to stay ahead ... they can be very hard to catch, even for Microsoft," said Maritz.

One of the things that Microsoft made the biggest mistake was not coming up with the money to buy VMware.  Microsoft went cheap and bought Connectix, the #2 player in virtualization, instead of VMware which was a lot more expensive.  Microsoft has given the opportunity to EMC, and EMC’s management was smart pushing out co-founder Diane Greene.

I wonder if EMC bought Paul Maritz’s company with the full intention to put him in charge of VMware.  What do you think?