What incoming CEO Raghuram means for VMware in the multi-cloud computing era

Come June, technology company VMware is expected to see a fresh leadership approach as Raghu Raghuram replaces Pat Gelsinger as its CEO. CFO Zane Rowe is the interim CEO.  

The IIT Bombay alumnus told Fortune that he considers himself a “technology centric leader”, as opposed to Gelsinger, who had the leadership style of an industry statesman, much like Salesforce CEO Marc Benioff. The latter two executives have regularly engaged in commentary on society, bitcoin and politics. 

“Gelsinger did a great job of making VMware the most dominant data center company and Raghuram will be tasked with doing the same thing but with the cloud,” Zeus Kerravala, founder and principal analyst at market research firm ZK Research, told TechCircle.  

Kerravala, however, is concerned about VMware’s top head staying away from commenting on technology related socio-political developments. 

“His comments to Fortune about not wanting to take an active role with social issued did concern me though as I believe all the CEOs from the major tech companies need to help, not just with technology transformation, but with social change,” opines Keraavala.  

According to the California based global cloud computing and virtualisation company’s lead independent director Paul Sagan, Raghuram’s appointment comes after a “thorough and thoughtful research by the board”.  

“(He has been chosen) because he embodies our innovative culture, represents our values, and has a clear vision for VMware’s future,” Sagan said in a statement. 

Michael Dell, chairman of the VMware board of directors, added, “Raghu is now in position to architect VMware’s future, helping customers and partners accelerate their digital businesses in this multi-cloud world.”  

Raghuram’s appointment coincides with the exit of COO Sanjay Poonen, who was reportedly the top contender for the CEO position.  

“It's been a great time @VMware the past 7 yrs; friendships created, all we’ve built together, employees touched, and customers/partners impacted.” Poonen tweeted.  

“I thought Sanjay Poonen was the odds-on choice for the role and I know many are surprised about that. Poonen had a winning track record and was a cultural lighthouse for the company. That’s hard to find and I think will be sorely missed,” Patrick Moorhead, founder, president and principal analyst at high tech advisory and consulting firm Moor Insights & Strategy, told  TechCircle.  

Moorhead said that he expects quick strategic, product and personnel decisions from the new CEO.  

“As he has been at VMware for 20 years, I wouldn’t expect a listening tour as someone from the outside would require,” Moorhead said to TechCircle.  

VMware was expected to be spun off as a separate entity while continuing to engage in strategic partnerships, as per an announcement by owner Dell last month. The firm has survived two ownership changes since its inception in 1998. 

Raghuram has been credited with playing a pivotal role in the company’s mergers and acquisitions strategy, and with driving partnerships with Dell and other technology giants. This skillset is expected be crucial as the company moves forward with the spin off. 

“I am honored and thrilled to lead @VMware as the next CEO. We have an enormous opportunity in front of us and are uniquely poised to lead the multi-cloud computing era,” Raghuram tweeted.  

In an interview with CRN, the Indian origin executive said, “That really is what I was appointed to do, to make us the leader in multi-cloud computing. That’s the focus of the next few years.” 

Rob Enderle, founder of technology advisory services company, Enderle Group said that Raghuram’s selection showcased that Dell Technologies is happy with the direction VMware is going and wants to assure the direction with minimum disruption.  

“Should Dell spin VMware out, he will show well to investors as a subject matter expert with deep knowledge of VMware's operations.  However, he is new to the CEO role but can rely on Michael Dell and his team to help with that transition,” Enderle told TechCircle.  

Additionally, India is expected to be a prominent player in the firm’s future growth.  

The company currently has 7,000 employees across Bengaluru, Pune and Chennai. In 2018, the company had earmarked a $2 billion direct investment in the country by 2023. 

It looks to see a growth of 9.5% year-on-year to $2.994 billion in the first quarter of the new financial year, with subscription and SaaS licensing revenue going up 12.5% to $1.387 for the same period. And this subscription and SaaS growth is expected to be one of Raghuram’s key responsibilities in the company.   

“Even in the newest strategy of cloud anywhere workspace and Tanzu, every one of our implementations had been helped by him, including our overall SaaS and subscription migration,” Ramkumar Narayanan, vice president of technology and managing director of VMWare India, told TechCircle.

Raghuram’s VMware journey began in August 2003 as the director of product management. In 2008, he led its server business unit as the as the executive vice president and general manager. He has also served as the technology firm’s general manager for cloud management and infrastructure division, and the software defined data centre division.   

In 2016, he was elevated to the post of the executive vice president and COO of products and cloud services.   

Raghuram has held crucial roles in developing the company’s core virtualisation business, driving its software defined data centre strategy and SaaS transformation efforts, the company said.   

Prior to joining VMware, he was the director of product management at LAN delivery and application messaging company Bang Networks. The 1996 Wharton School MBA graduate also served as the director of product management at web services company Netscape till 2000. 

(With inputs from Supriya Roy)