900 job cuts result of VMware realignment

This week a corporate realignment resulted in 900 job cuts at VMware. Although VMware‘s profits remain high, many are reporting the growth for the pioneer in virtualization solutions is slowing down.  The company had a strong fourth quarter, with a net profit of US$206 million. This was up from $200 million the previous year. Revenue rose 22 percent to $1.29 billion. Changes in the industry and customers who are looking at alternative technologies for virtualization, seem to be causing some issues for VMware. Although owning leading and cutting edge technologies in their portfolio, is VMware properly positioned to maintain the market share they have owned for years? Can their SDDC and SDN initiatives keep customers from moving to competing technologies? Shifting into these markets will bring more competition to VMware from other Cloud and SDN Vendors.

Below is the Gartner Magic Quadrant for x86 Server Virtualization Infrastructure

900 Job cuts at VMware

2 major VMware Exoduses in the last 6 months

July 19, 2012: Paul Maritz becomes EMC chief strategist, while Pat Gelsinger takes over as VMware CEO.

January 17, 2013: Steve Herrod announces, he is leaving VMware as CTO and Senior VP of research and development to join General Catalyst Partners, a venture capital firm.

Here is Steve Herrod’s goodbye tweet looked like.
900 Job Cuts at Vmware

Would I be correct or fair in saying VMware has been rather stagnant over the last couple of years. Steve Herrod gave those awesome presentations and you could feel his passion when he spoke. He was someone you believed when he delivered a keynote. Will VMware find someone to fill his shoes? We will find out sooner than later.

Will 900 job cuts and realignment give a needed boost to the company?

Despite the 900 job cuts, VMware says it will hire 1000 employees in 2013 and continue to expand. VMware’s currently employs 13 800 people. Based on their expanding portfolio, I would guess they would be looking to pursue opportunities in other areas complementing virtualization and cloud solutions. Here is a list of VMware acquisitions made over the last years from which activity should stem from.

Infrastructure and Operations Management

Application Platform
End-User Computing

Here is a link to VMware‘s Fourth Quarter and Year End Results for 2012, issued on Jan 28, 2013