With Prelim Q1 Results, VMware streamlines top management; announces new CEO, President

Digital Infrastructure giant VMware has announced the appointment of Rangarajan (Raghu) Raghuram as Chief Executive Officer and member of the Board of Directors, effective June 1, 2021. Further, the company has announced Sumit Dhawan as the Company President. Moreover, Interim CEO, Zane Rowe, will continue as CFO and Sanjay Poonen, COO, Customer Operations has decided to leave VMware after his 7 years at the company.

Raghuram currently holds the position of Executive VP and COO, Products and Cloud Services at VMware. He joined the company in 2003 and led several strategic direction and technology evolution. He helped grow the core virtualization business and drove the company's software-defined data centre strategy. Raghu also constructed and guided VMware’s cloud computing business and SaaS transformation efforts. Further, Raghu played a pivotal role in the company’s M&A strategy and partnerships with Dell Technologies etc.

Raghuram’s predecessor, Pat Gelsinger joined Intel as CEO in February.

“VMware is uniquely poised to lead the multi-cloud computing era with an end-to-end software platform spanning clouds, the data centre and the edge, helping to accelerate our customers’ digital transformations,” said Raghu Raghuram. “I am honoured, humbled and excited to have been chosen to lead this company to a new phase of growth. We have an enormous opportunity, we have the right solutions, the right team. We will continue to execute with focus, passion, and agility,” he further added.

“I am thrilled to have Raghu step into the role of CEO at VMware. Throughout his career, he has led with integrity and conviction, playing an instrumental role in the success of VMware,” commented Michael Dell, chairman of the VMware Board of Directors. “Raghu is now in a position to architect VMware’s future; thus helping customers and partners accelerate their digital businesses in this multi-cloud world.”

According to a Bloomberg report from April 2021, Dell has been cleaning up its balance sheet in recent years. It has also been hiving off a variety of businesses, for example, it is spinning off its stake in VMware, its most valuable asset (revenue at average 12% of total). In an interview with CRN, Raghu outlined what Dell’s spin-off of VMware will enable. He said, “Regardless of the corporate ownership structure, we have had extraordinary technical collaboration and extraordinary go-to-market collaboration with Dell. What we have done now with the impending spin-off is, we have also quantified this into a strategic business agreement and we’ll execute against that.”

Other Major Appointments

Paul Sagan, VMware’s lead independent director also announced that Zane Rowe, who led the company as Interim CEO, will continue with VMware as CFO.

Further, VMware also announced Sumit Dhawan as the President. Sumit will lead all go-to-market functions. These include Worldwide Sales, Worldwide Partner and Commercial Organization, Customer Experience and Success (CXS), Marketing, and Communications. Sumit also has broad experience in building and scaling subscription businesses. With his customer-centric orientation, Dhawan, current SVP and CCO, will take on the leadership of these teams.

Sanjay Poonen, currently COO, Customer Operations, who leaves the company extended his congratulations to Raghu. “I know he will take the company to new heights. I will be cheering on the company’s success, as I embark on my next adventure.”

Q1 Result Expectations for FY 2022

VMware plans to release its full fiscal first-quarter 2022 financial results on 27 May. It also released preliminary results on Wednesday.

• Revenue - $2.994 billion, an increase of 9.5% from the first quarter of fiscal 2021.

• Subscription and SaaS and license revenue - $1.387 billion, an increase of 12.5% from the first quarter of fiscal 2021.

• GAAP operating margin - 18.7%

• The non-GAAP operating margin - 30.8%

• GAAP net income per diluted share - $1.01 per diluted share

• The non-GAAP net income per diluted share - $1.76 per diluted share.