VMware: Who Hit the Self-Destruct Button?


Virtualization software maker VMware is looking worse for the wear this week. The company's co-founder and top scientist will step down after leaving the building tonight. Mendel Rosenblum announced his resignation in an e-mail Monday night -- but his departure is far from the first step in the company's ongoing struggle.

CEO Diane Greene -- Rosenblum's wife and co-founder -- was given a pink slip in July. A high-ranking product development exec left last week to go back to Oracle. As for Rosenblum, he's moving into full-time teaching at Stanford. Of the three, the biggest hit to the company's coffers came with the CEO change: Shares fell a full 27 percent the day Greene got canned, compared to about 7 percent with today's news.

The company itself blames competition from giants such as Microsoft -- which, in no coincidence, unveiled its new line of virtualization products Monday -- along with the general bad economy for its woes. Others see the sweeping executive changes as having started a tailspin that can't be stopped.

In a twist of bad timing, VMware is set to hold its annual user conference next week. That promises to be a fun and cheer-filled event...anyone want to go?