VMware's Cloud Computing Goals

As the No. 3 executive at Microsoft, Paul Maritz supervised over the company's Windows juggernaut, turned aside competitions from Netscape and Sun Microsystems, and pushed the company to embrace the Internet. Now, the longtime software executive is looking down Microsoft from the other end, trying to help his new employer, VMware, succeed where past Microsoft competitors fell short.

In his new job, Maritz is leading VMware's charge in the growing battle over cloud computing, the trend that's forcing companies to shift computing power away from their own machines and into the hands of tech powerhouses such as Microsoft, Google, Amazon.com, and Salesforce.com. VMware wants to be a player in cloud computing, too, and Maritz, CEO since July, is embarking on a major engineering project to try to get there.

"That says to Microsoft, 'We're coming right after you,'" says Jayson Noland, an analyst at Robert W. Baird who has an impartial rating on VMware.

VMware needs some triumphs. In less than a year, it has gone from high business success story and stock market darling to a company whose slowing growth and plunging shares that fired of its former CEO and co-founder Diane Greene. Shares of VMware slumped 1.22, or 5%, to 22.42 on Nov. 12.

VMware held 2007's most successful initial public offering by specializing in virtualization software that helps companies slash costs by making more efficient use of their computers. Now, VMware needs to show customers and investors that it can move beyond virtualization and remain worthy of a piece of companies' tight tech budgets while preventing a competitive onslaught from Microsoft.

"If VMware just coasts on its past achievements and lets Microsoft catch up, it will have a problem," says a former Microsoft executive, who asked not to be identified as he maintains ties to Maritz. "But I don't think you'll see them sit still."

Putting His Mark

Maritz is on the move. "In technology, if you stand still, eventually your value proposition evaporates," he says, holding forth in a sunlit conference room at the company's Palo Alto headquarters. On Nov. 10, VMware announced it had bought the French company Trango Virtual Processors, moving it into the market for software that powers mobile phones. In late October the company launched its first advertising campaign, featuring customer testimonials. Even competitors say Maritz is already making his mark. "He's a great hire for VMware," says Marc Benioff, CEO of Salesforce.com. "He understands where VMware should go."