Transformation in a time of Crisis

What does a silicon valley leader do when their company’s groundbreaking technology starts to lose momentum, faced with strong competition, uncertainty in the board room and falling stock prices, would you have the vision to see through the storm to the other side.

Steve Jobs set the bar when he turned Apple around, we remember the iPhone as perhaps one of the greatest product launches in the tech industry. But transformation began when in 1996 Apple purchased NeXT and brought Steve Jobs home. Some of the changes he made initially exacerbated Apple’s decline resulting in only 3% of new computers running Apple’s operating system, share prices fell to a 12-year low. However in the end, the changes that Jobs made turned Apple into the most valuable company in the world.

Last week I spent a couple of days on VMware’s Campus in Palo Alto, VMware had previously taken enterprise IT by storm with its server virtualization software, for over a decade it dominated, then in a climate of boardroom uncertainty, mixed with other factors such as the strong growth of public cloud, it’s stock price dropped to a 5 year low late 2015.

Now some of us focus only on the technology, but poor stock market performance can kill a giant. In a session with VMware CEO Pat Gelsinger he explained how a good leader needs to Lift others, he recalled how he made a concerted effort to rise above his own concerns and be positive, realizing the effect it would have on his staff. In the darkest moment he told his board, if you don’t fire me, I will get us through this.

Have a look at VMware acquisitions since 2015

However, it was way back in 2012 that VMware acquired Nicira, and with it the intellectual talent in defining network objects as software. Server virtualization had abstracted logical objects from physical hardware. Software-defined networking would do something similar for increasingly complex network.

In 2014 VMware expanded End-User Computing solutions by acquiring the leading provider of enterprise mobile management and security solutions. AirWatch’s offerings increased VMware’s portfolio of solutions for Mobile Device, Application and Content Management.

VMware stock price has climbed since the 2016 turnaround. Results for the 2019 financial year show a record annual revenue of $8.97 billion, increasing 14% from 2018 FY. License revenue increased 18%, but look at the other drivers. VMware Cloud on AWS continues the momentum, largest deal ever at approximately $20M. The networking and security family (NSX and VeloCloud) experienced 50% growth, with over 10,000 customers. Full year bookings for NSX reached approximately  $1.3B. EUC total bookings were over $1.6B for the year. In the 23 deals over $10M, EUC was included in 10 deals, and NSX in 9, and vSAN in 8.

The story behind many of these acquisitions is to buy the best in the business, with Heptio VMware has once again onboarded the talent behind the technology, in this case, Joe Beda and Craig McLuckie, two of the creators of Kubernetes. I’ve got a strong feeling that Kubernetes is going to be a very important part of the VMware of the future.

I understand this post makes me look like a VMware fanboy, and perhaps I am, but I can’t help but admire people with vision, values and toughness to ride the storm. Plus I think there is a lesson for all of us in this, defeat is how we handle the crisis, and success is when we see it as our greatest opportunity to grow.

Ref: https://www.vmware.com/company/acquisitions.html

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