Faces of Business 2007: Diane Greene, VMware CEO : @VMblog

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Faces of Business 2007: Diane Greene, VMware CEO

The San Francisco Chronicle writes:

To understand the heady success of Palo Alto's VMware , you need to understand its CEO, Diane Greene.

The president of one of the valley's hottest companies is a private person who loathes talking about herself. But the breakaway performance of her company - which has become the fourth-largest publicly traded software firm in the world after an initial public offering in August - has much to do with the woman who runs it.

An MIT- and UC Berkeley-trained engineer and computer scientist, she brings a geek's eye for results to VMware's business of virtualization. As a lifelong sailor, she provides a sense of patience, poise and long-term vision as CEO. And as the third of four children, she's always looking for ways to broker peace and establish partnerships.

It's these traits that have helped VMware register the largest tech IPO since Google and become one of the biggest business stories of the year. The company, founded in 1998 by Greene and husband Mendel Rosenblum, owns more than 80 percent of the emerging virtualization market.

Virtualization refers to the ability of a computer server that normally runs one operating system to handle multiple platforms, allowing it to perform the work of many machines. Virtualization not only helps keep hardware costs down for companies, it helps reduce a company's energy use by eliminating the need for multiple servers.

VMware, a subsidiary of storage maker EMC, raised almost $1 billion on its first day of trading. The stock was offered at $29 per share, shot up immediately to $52 and now runs about $90 per share, giving the company a market capitalization of $34 billion.

But with the success has come competition. Heavyweights like Microsoft and Oracle, along with smaller rivals like XenSource and Virtual Iron Software, are all trying to outmaneuver VMware if not on performance, at least on price.

It's in these moments that officials lean even more on the principles of Greene, whose quiet calm seems well suited for the roiling waters ahead.

Greene is not your typical CEO. Despite being the public face of the company, Greene seems more comfortable behind the scenes, putting the pieces in place for success. Even when asked about her success, she is quick to return the attention back to her company.

She declined a request to be interviewed for this article, saying only, "Building the company with the community of people that work at VMware along with our partners and customers is extremely engaging."

Her low-key approach has been woven throughout the fabric of the company, and is noticeable in its marketing to customers. Where other companies may exaggerate when promising results, Greene focuses on delivering value and quality, letting the results speak for themselves.

"She's about solid things, solid execution, solid quality," said Reza Malekzadeh, senior director of product marketing. "It's about delivering something concrete and valuable."

Maybe it's her technical background that keeps her from indulging in CEO hype. She earned a bachelor's degree in mechanical engineering and a master's degree in naval architecture, both from MIT. She later earned another master's degree in computer science from UC Berkeley.

That engineering background has helped her relate to her workers and understand the intricacies and importance of what they do, colleagues say, well enough to turn around and passionately sell it to others. Greene prizes talent and ideas over office politics and has built the company, even the physical layout of the Palo Alto headquarters, with an eye toward collaboration and interaction.

The offices are built with open glass walls, and employees can peer into Greene's office from parts of the cafeteria. Greene hosts monthly lunches with employees and established a hot line that allows workers to inquire about any policy in the company.

"She's absolutely about open communications, and there's no politics going on. It's really a meritocracy, where the best ideas come to light," said Stephen Herrod, vice president of research and development. "That's refreshing and that's what allows us to get the products so strong and adopted so quickly."

Greene grew up sailing on the Chesapeake Bay and later became an avid windsurfer. Her nautical training is an asset she calls upon to help lead. She tells people it helps her prepare and organize, weighing the conditions and being aware of dangers, including competitors.

The last several years have required some careful planning by Greene. The company turned down a buyout offer by Microsoft in 2002 but accepted a deal in 2003 with storagemaker EMC for a reported $680 million. Though some top officials were split on the deal at the time, many say it worked out for the best, giving VMware the financial wherewithal to stay ahead of its emerging rivals.

A key condition of the deal laid down by Greene was that VMware had to remain an independent subsidiary of EMC, which could have tried to sell VMware aggressively to its clients and forced VMware to work primarily with EMC products. That independence - the companies share next to nothing - has allowed VMware to rack up significant partners and corporate customers.

"She has never tried to lock people into any technology," Malekzadeh said. "That openness has held true because people see that we have the best value, not that we're trying to lock them in."

With the competition heating up, Jeff Byrne, an analyst with Taneja Group and a former VMware executive, said VMware will benefit from Greene's strong vision and push for excellence.

"I think the thing that's made her a strong leader is she has high integrity and she's always good on her word," Byrne said. "She's very passionate and she sets high standards and she actually lives up to them."