July 17, 2012 / 7:01 PM / 7 years ago

VMware off more than 3 pct on report CEO is leaving

* EMC exec Gelsinger to become VMware CEO - report

* VMware’s current CEO may return to EMC - report

* Officials with VMware, EMC decline comment

(Adds analyst comments, background)

By Jim Finkle

BOSTON, July 17 (Reuters) - VMware Inc (VMW.N) shares fell more than 3 percent on Tuesday after a leading technology news site reported that Chief Executive Paul Maritz was leaving the maker of business software.

Reuters could not confirm the report from CRN, which quoted unnamed sources as saying that Maritz would be succeeded by Pat Gelsinger, a senior executive at VMware’s parent, EMC Corp EMC.N. Both Maritz and Gelsinger are highly regarded by the investment community.

Officials with VMware and EMC declined comment.

Analysts describe Maritz as a technology industry visionary who has helped turn VMware into one of the world’s biggest software makers.

Investors were skeptical about the software maker’s future when Maritz was named to the post: Shares hit a historic low on the day of the announcement in July 2008, tumbling as much as 30 percent, as Maritz replaced VMware co-founder Diane Greene and the company also issued a revenue warning.

He has since earned the respect of investors and Wall Street analysts alike as the stock more than doubled over the following four years. VMware’s sales have grown as the company introduced new products focused on cloud computing, one of the fastest-growing areas in the technology sector.

“We have great admiration for Mr. Maritz and view his departure, if true, as a loss,” Nomura analyst Rick Sherlund said in a note to clients.

Maritz worked at Microsoft for 14 years through 2000, managing the development and marketing of products including Windows 95.

He joined EMC after the storage giant acquired a cloud-computing company that he founded, Pi Corp. He ran EMC’s cloud computing division before being named CEO of VMware in July 2008.

His reported successor, Pat Gelsinger, is a former Intel executive and the current president of EMC’s infrastructure products division.

Gelsinger and Maritz, along with EMC CFO David Goulden, have been considered leading candidates to succeed EMC’s long-time CEO, Joe Tucci. EMC has said Tucci will remain CEO through next year. [ID:nL2E8CO1BW]

Kaushik Roy, a principal with Hercules Technology Growth Capital and long-time EMC watcher, said that if Gelsinger is actually named CEO of VMware, that would signal he is no longer in the running to succeed Tucci.

“Maybe they are bringing back Maritz to head EMC,” Roy said. “He is a tech visionary and big companies need a tech visionary at the top.”

Shares in the top maker of virtualization software fell 3.5 percent to $81.45 in midday trade on the New York Stock Exchange. EMC shares were down 1.3 percent at $22.99.

(Additional reporting by Supantha Mukherjee in Bangalore and Nicola Leske in New York; editing by M.D. Golan)

((jim.finkle@thomsonreuters.com)(+1 617-856-4344)) Keywords: VMWARE CEO/

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