The general manager of one of VMware's star business units has jumped to Google, stoking fears that more could follow
- Business Insider has confirmed that one of VMware's key employees, who joined the company when it was a startup, is leaving.
- This exec was overseeing VMware's networking product, on track to do $1.4 billion in revenue.
- His departure stokes worries that if Dell goes through with a potential reverse merger of VMware, an idea that Wall Street hates, more talent will jump ship.
Business Insider has confirmed that long-time VMware executive Jeff Jennings has left the company and joined Google's cloud division, working once again for Diane Greene.
Jennings had been at VMware since 2000, two years after it was founded, hired by cofounder Greene herself, who was in those days the company's CEO.
The news comes as VMware's fate is up in the air, with a potential reverse merger by parent company Dell under consideration. And the exit of a star executive like Jennings is likely to raise further scrutiny about the risks of such a merger on VMware's leadership ranks.
A VMware spokesperson tells us: "Jeff Jennings, general manager, Networking and Security Business Unit, has made a personal career decision and left the company effective February 16. We thank Jeff for his passion and commitment and wish him well. As we look for a new leader, Rajiv Ramaswami will assume the role of acting leader for the Networking and Security Business Unit."
Jennings joined VMware as one of the company's first sales engineers, was promoted to lead the SE team and grew it into a large international team. Greene was so impressed with him, that she praised him in a 2015 interview with another early employee Jerry Chen.
In 2015, Greene said of Jennings and his background as an officer in the Navy, "Always hire a military guy if you can. They are the best. They are so disciplined. ... He came in as an individual contributor doing sales engineering and he built that team out to quite large. He's still there."
Managing one of VMware's crown jewels
About a year and half ago, Jennings was promoted to general manager of the Networking and Security division, when its previous leader, Ramaswami was promoted to a COO role at the company.
Networking is one of the premier growth areas of VMware.
The crown jewel networking product for which Jennings was responsible is called NSX. It grew license bookings 24% year-over-year for Q4 and over 50% for the full year, CEO Pat Gelsinger said during the quarterly conference call when VMware reported its Q4 FY 2018 earnings last week.
Based on that one quarter's revenues, the product was on track to be a $1.4 billion annual revenue product, Gelsinger said.
Given how highly Greene thought of Jennings, it's not surprising that if he wanted to jump ship, he would call her and she would hire him.
Fears of a brain drain
Given Jennings' long tenure at the company, his departure has stirred internal rumblings that other top talent could flee VMware if Michael Dell proceeds with a potential reverse merger, a source tells Business Insider.
That merger would make Dell a public company again under VMware's stock symbol, and would mean that VMware is no longer an independent company.
Dell became the majority owner of VMware when it bought its previous majority owner EMC in 2016. For months prior to the deal, Michael Dell lobbied EMC and VMware shareholders promising back then that VMware would "remain an independent company."
That promise now looks like less and less likely, and several Wall Street analysts have criticized a potential Dell reverse-merger as a terrible move for VMware shareholders.
Daniel Ives of GBH Insights published a note on it Monday, saying, "the potential Dell reverse merger being discussed would be a major gut punch and value destructor to the VMware growth story."
Barclays and Morgan Stanley have also been negative on the idea.
We understand that the leadership of Dell is not too keen on the idea either.
Board member Paul Sagan has promised, "The VMware Board of Directors is committed to creating value for, and protecting the interests of, all stockholders."