VMware Is Doing the EMC Shuffle


VMware (NYS: VMW) is shaking up its executive suite. No, there's no scandal involved -- just a board of directors with horse sense and long-term plans.

CEO Paul Maritz is heading out, stage left, to become chief strategist at the storage-oriented mothership. His replacement will be EMC (NYS: EMC) president Pat Gelsinger, keeping the virtual computing giant's reins close to the EMC vest. The two men both come with brilliant pedigrees although cut from different cloth: Maritz is a former VP from Microsoft with tons of software expertise, while Gelsinger's resume includes three decades at hardware king Intel.

Moving Maritz back to EMC puts him in line to take that CEO job if and when longtime leader Joe Tucci retires. At the same time, Maritz stays on VMware's board of directors, close enough to EMC subsidiary VMware to guide well-respected executive Gelsinger into his new position. This is a smart and smooth transition for both companies, and hardly a downgrade in either EMC's or VMware's CEO offices.

Moreover, it's a great time to stir VMware's pot right now. CFO Mark Peek left the company last month in another orderly, well-planned transition. Peek moved on to join another hot start-up, possibly paving the way for cloud-computing specialist Workday to go public in 2013. But change begets change, so why not take this opportunity to prepare the two companies for another few years of long-term excellence?

Both stocks jumped more than 5% in after-hours action last night, cheered by this careful succession plan as well as strong pre-earnings updates from both companies.

Don't forget that big data will keep both VMware and EMC relevant for years to come, no matter who sits in their CEO chairs. Click here to read our special free report on the topic.

At the time thisarticle was published Fool contributorAnders Bylundholds no position in any of the companies mentioned. Check outAnders' holdings and bio, or follow him onTwitterandGoogle+. The Motley Fool owns shares of EMC, Microsoft, and Intel.Motley Fool newsletter serviceshave recommended buying shares of Microsoft, Intel, and VMware.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Microsoft. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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