Why is everyone against Magoo when Pat Gelsinger was CEO between 2012 and 2021 and considered to be an hero? One of the best CEO of the world?
Is he now doing miracles in Intel been surpassed even by AMD/TSMC and still saying that RISC processors are not a threat?
Pat G. helped keep this from happening but had to run off to save Intel as Biden started destroying the economy. The Internet rate writing on the wall, Michael Dell and Silverlake took the opportunity to bail on VMware and prevented Sanjay from becoming CEO as he too would have tried to prevent the sale.
I've been with VMware for more than 20 years. Paul Maritz did well, but he didn't see the threat from AWS, famously thinking a bookseller couldn't compete. Pat, however, realized AWS was investing more than VMware's entire revenue annually to build its cloud infrastructure. Acquisitions like Nicira in 2012 contributed to growth, turning into a billion-dollar business in NSX. VMware entered the telco space with NFV when the market was ready. The Velocloud acquisition wasn't handled perfectly, but it expanded into new areas. Not all moves succeeded, but the goal was to keep VMware competitive and valuable to customers.
Moving away from vCloud Air allowed VMware to focus on its 4,000 global partners, selling VMware-based workloads. Pat wasn't flawless, but he sustained growth despite challenges. The low stock price was due to debt, more tied to owners than the CEO. Pat grew VMware's product base amid a changing competitive landscape. Consider how much further VMware could have gone if the $22.5 billion paid to Dell/shareholders from 2018 to 2021 had been used for growth. Financial engineering, using VMware like an ATM, is the core problem. The company should have been spun off earlier, but now it's driven by returns. Dell/Silverlake want another $40 billion from the VMware-Broadcom merger, extracting all capital used to buy EMC and VMware. So the entire transaction would be paid for by VMware giving them EMC for free. This is the mischief hurting the firm. Does VMware need to trim some fat? Yes. However, the core problem is the firm being caught up in this leveraged buyout nonsense.
“ VMware had around $5.5b in revenue in 2015, by 2021 when he left it was more than double.”
VMware also let aws eat their lunch under his watch. Not to mention the trend towards containers.
That's not the way I recall it. Maritz was the one that got us into the cloud market in the first place. But VMware's cloud product could not compete with Amazon's and Microsoft's cloud business due to the huge amount of cash they were investing in infrastructure and data centers around the world.
Pat saw that the amount of money it would take to compete was not worth it. Instead, he switched to the "Switzerland" approach which eventually turned in to multi-cloud. That was a really smart move in my opinion.
“Michael Dell armtwisted VMware to issue two special dividends of over $20b”
Really?? So that must mean there is no way he would arm twist the future CEO into selling to broadcom for $61B, right? Nice try, though.
The company kept growing because of the stupid acquisitions that have now come home to roost. If you still need convincing, go compare S&P 500 returns with VMW during these “golden years” under Pat, which also happened to be during the longest bull market.
“ VMware had around $5.5b in revenue in 2015, by 2021 when he left it was more than double.”
VMware also let aws eat their lunch under his watch. Not to mention the trend towards containers.
“ He was hobbled by Michael Dell.”
And raghu isnt?
Regardless, CEO’s performance is a lagging indicator. Raghu may be worse, but this is completely Pat’s mess.
Intel has slowly started turning around - stock has been ticking upwards.
Stock price is not indicative of a well run company.
Why is the price going up?
Because they are doing a great job?
Because the hedge funds are manipulating?
Because Intel is buying its own stock?
It isn't because they suddenly have a good product and fabs galore.
and Herrod were here.
Herrod the Horrible.
Did nothing notable.
Say what you want about Maritz, but at least HE HAD A PLAN.
He was hobbled by Michael Dell.
That may be true, but it is also the case that he was a terrible CEO.
He allowed the corruption to fester, grow and become malignant.
When people pointed out to him, directly. how bad some of our products were and how good they could be (by example, not hypotheticals) he ultimately pushed the messenger out and promoted the manager responsible for the bad products.
Intel has slowly started turning around - stock has been ticking upwards. He came into a company that had over a decade of under investment. Remember it was Apple releasing the M1 that was the final trigger for the board to approach him at Intel.
He was hobbled by Michael Dell. VMware had around $5.5b in revenue in 2015, by 2021 when he left it was more than double.
Michael Dell armtwisted VMware to issue two special dividends of over $20b (even today - more than the gross revenue of the company) so that he could deal with his debt load, effectively wiping out all the cash VMware had to spend on growth / innovation. That the company kept growing under these circumstances is what is admirable about Pat. The debt hangover VMware has will be there for the next decade.
Both CEOs were bad. The people that groveled for Pat, are the same rear kissers who groveled at Raghu. These are the same people you see in the audience on the all hands calls, who laugh, dance with, and praise the executives. It's a type of modern day aristocracy, with plebes and peasants lined up to cheer on command. It's disgusting. Leaders should be judged by their results, and no one has really done anything significant since Maritz and Herrod were here.
Late stage capitalism. Shareholding is concentrated.
Most people buy index funds. The index funds are by vanguard or Blackrock. So most shares are controlled by them by proxy.
The vmw is the worst case because on top of index funds we have MD and Silverlake that owns the rest.
The fund houses can push things like ESG and DEI and all kinds of nonsense. They create these boards and then put some random ceo.
Very few people control what happens to all the people around the world.
All this is made possible with trillions of debt. But the debt is blowing up recently. The interest payments of the US government crossed a trillion annually. Most corporations are heavily indebted as the wealth is transferred to the few individuals.
The US China dynamic is another part where US is hollowed out.
Anyway expect many changes as this late stage capitalism crumbles.
It's clear, based on actual results, that "CEO pay for performance" is ridiculous.
Nobody has truly earned the millions of dollars given to CEOs by their board of directors.
The typical executive compensation model rewards inept leadership, while the rest of us are offered a small fraction of the benefits that bad leaders routinely get, and then leave.
The most bizarre thing is that failed CEOs are often hired again and again. It's the board of directors performing poor due diligence on their leadership selection process.
Vmw has been on autopilot for a long time. It appears as if people are waiting for HT or someone to sc--w everyone. MD is only interested in special dividends. Expect more of the same.
Both can be bad at the same time.
I never understood the whole putting Pat on a pedestal stuff. He is charismatic, but arguably assembled/enabled a pretty poor executive team...including Magoo.
So many obviously wrong missteps along the way.
Gelsinger was an awful CEO. Support became a joke under his watch.
who is Magoo at the end?
No one can say anything. Not HT not MD. The truth is they are getting fugged by pooh. They can't even talk about it. If they open their mouth then they will disappear.