Stock in virtualization provider VMWare today dropped almost 25%, as growth expectations were lowered and founding CEO Diane Greene was replaced by the board. Prior to today, VMWare was the fourth largest software company in the world, with a market cap of over $20B. They have slipped down the list and lost $5B in value as the company struggles to match high growth expectations places on it after its much-hyped IPO almost a year ago.
Greene, an original founder of the VMWare company, will be replaced by Paul Maritz as President and CEO, and he has also been assigned to the board of the company. Maritz was the founder of Pi Corporation, a cloud based storage and services provider that was acquired by EMC last year. Previously Maritz was the VP of Cloud Services at EMC, and prior to that he was a long-term executive at Microsoft.
The company faces a number of fresh challenges as the virtualization market heats up with the entry of Microsoft with their virtualization platform, now built into Windows Server, and their new Hyper-V product, which will retail for only $28, fractions of the cost of a VMWare solution.