(c) 2008 by Darek Mihocka, founder,

July 18 2008
(171 days until Macworld Expo 2009)

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Happy Birthday, Intel!

Before I get on with the bad news about VMware, I just wanted to wish Intel a happy 40th birthday today. Forty years of Moore's Law and going strong. AMD is marking the occasion by bleeding money and replacing their CEO, Hector Ruiz. ABBA is resurrecting songs from Intel's first decade for the Mamma Mia movie which opened today. And I, well, I am about to rant an earful without picking on Intel even once.

Microsoft Bluffs, VMware Implodes

Following the long anticipated departure of Bill Gates from Microsoft last month as well as Microsoft finally releasing the long promised and much hyper "Hyper-V" product, July should have been a quiet month, with most of the world lined up at an Apple Store to upgrade to iPhone 3G, and me, at the Emulators bunker here examining Hyper-V and comparing it to VMware Workstation 6.0 for a future posting. For the past few months I have been pondering what VMware was up to, why their Workstation 6.0 product is still so buggy a year after its release, why they haven't been contributing more to virtualization research, and why they've seemingly just been rolling around in their money instead of innovating. VMware has not been its usual self since going public last year with an IPO, that's for sure, and perhaps their slacking would give Microsoft a chance to catch up. The good news for VMware: in my analysis so far, Hyper-V turns out to be more problematic than anticipated. VMware if anything should have breathed a sigh of relief over Hyper-V, but instead responded to Microsoft's latest serving of FUD with an unexpected and unnecessary knee jerk reaction.

All that mystery got answered on July 8th as VMware imploded under the weight of its own hype and shareholder expectations. I was stunned to read the news about the firing of CEO and founder Diane Greene by parent company's board of directors. What is even scarier and just utterly unbelievable is who the board selected to replace Diane, the former number three man at rival Microsoft. Did Microsoft just plant a Trojan horse at VMware or is this really happening?

VMware. R.I.P. 1998 - 2008

As far as I am concerned, this is the end of the VMware we have all known and admired for the past 10 years; a victim of Wall Street greed. At first I thought Diane had chosen to willingly step down, much as Bill Gates did or Hector Ruiz just did, which would not have been as shocking, until I read more of the news reports. EMC apparently fired Diane because, get this, VMware was only growing by about 50% this year. How absurd! Not counting the morally bankrupt mortgage bankers and the corrupt oil merchants that are destroying the American economy these days, any American business that could grow 50% this year in this economy should be applauded for doing something right. Oh, almost forgot the vultures we call lawyers, who I just read are expecting a banner year of bankruptcy cases. With corrupt CEOs taking paychecks in the millions for defrauding this nation, it seems counterintuitive and wrong to reward a successful CEO by firing her. Yet 50% growth just doesn't cut it in the eyes of the Wall Street types. Just yesterday, Microsoft was dinged for only growing its profits by 42% over last year.

This all came qute suddenly as far as I can tell. Just a few weeks ago Diane Greene was interviewed for this piece talking about VMware and Microsoft which to me certainly didn't raise any alarm bells for me: Yet fueling the flames against her just days before her dismissal, the July 5 issue of The Economist, page 78, said of her and VMware:

    "Can she really keep Microsoft at bay? ... VMware has not yet decided what game it is playing. Ms Greene's plans for VMware do not sound terribly ambitious." - The Economist, July 5 2008

The Economist was making the point that VMware has been slacking of late. As the Wall Street Journal reported the following day on July 9 2008, VMware's growth had slowed from 88% in 2007 to a projection of just under 50% in 2008. 50% growth even when they're slacking? Who wouldn't want their sales to jump 50% in a year? Or to be 3 to 5 years ahead of Microsoft at the technology? Few other companies can make such a boast. How about creating a terrific VMware Fusion product in the Mac market after Microsoft had given up that same market? That's not ambitious? Hello?

I met Diane and her husband Mendel numerous times going back to Comdex trade shows in the late 1990's, and they will be missed. While VMware is not perfect, they did manage to develop a successful technology company, and most importantly, they did something I and others in the same line of work couldn't do in the 1990's - they made the general public aware of the concept of virtualization, they made the public want virtualization, and they turned virtualization into the "killer app" technology that will be as important to Mac and PC users as web browsers or email became in the 1990's.

New VMware CEO Paul Maritz - Microsoft's VP of Failure Division

So respond to The Economist, the way EMC's board plans to answer the question of keeping Microsoft at bay (and you couldn't even make up fiction as ridiculous as this) is by hiring Paul Maritz, former Microsoft vice president (

Under Paul's leadership, Microsoft spent hundreds of millions of dollars promoting the awful Windows 95 release which came out in August 1995. It paid to have banners drop from Toronto's CN Tower and the Sydney bridge, even purchased multi-million dollar television ads on Seifeld. All to promote the claim that Windows 95 was some huge 32-bit leap from Windows 3.1, when in fact it was so full of 16-bit MS-DOS code that most benchmarks such as this BYTE article from 1996 ( exposed that Windows 95 actually did very poorly on 32-bit processors such as the Intel Pentium Pro:

"Although Windows 95 supports 32-bit applications and data paths, critical components such as USER and GDI still contain large portions of 16-bit code, thus sabotaging the Pentium Pro's complex superscalar microarchitecture (see the story in this month's News & Views). To take advantage of the Pro's improved performance, you need to run a true 32-bit OS such as NT. If you're sticking with Windows 95, go with a fast Pentium, perhaps the new 166-MHz model." - BYTE magazine, February 1996

I remember this fiasco, which is covered in Robert Colwell's book Pentium Chronicles, which describes how even Intel was bamboozled by Microsoft into believing that Windows 95 was the end of 16-bit code. Thank Paul Maritz for that fiasco. Windows 95 was never supposed to even be a 32-bit operating system. The original famous "Chicago" memo by Paul that circulated around Microsoft in May 1992 called for the successor of Windows 3.1, codenamed "Chicago", to be released in 1993 as "Windows 93". What seemed like a well orchestrated product launch in August 1995 was really a very heavily delayed 1993 product.

And do you remember Windows 2000 five years later? Following several annual Windows NT releases (3.1 in 1993, 3.5 in 1994, 3.51 in 1995, and 4.0 in 1996), Windows NT 5.0 was originally intended to be lofty grand unifying Windows release that merged the 16-bit product line (Windows 3.1, Windows 95) with the 32-bit product line (Windows NT). Plug and Play was big, and as this old blog posting shows ( people were excited when their sound card "just worked" in the beta of NT 5.0. But NT 5.0 dragged on. And on. And on. Not helping was Paul's vision of putting "Cairo" into NT 5.0 and shipping it all in a 12-month release cycle! I love this absurd Microsoft quote on CNET ( from 1996:

    "We thought we'd make a big bang with Cairo and we'd solve all the world's needs". - Microsoft, October 1996

Ultimately, the fog of Cairo and Windows NT 5.0 dragged on so long, Microsoft shipped four more successors to Windows 95 (those being Windows 95 OSR2 which added some of the missing 32-bit code not included in Windows 95 such as support for FAT32, Windows 98, Windows 98 Second Edition, and Windows Millennium) by which time Windows NT's marketing team had to embarrassingly rename their product to "Windows 2000" hoping people would have forgotten about the Windows NT 5.0 hype. In the end, Windows NT 5.0 a.k.a. Windows 2000 didn't unify the product lines, didn't have great 16-bit backward compatibility it needed, shipped 3 years late.

To add insult to injury, Microsoft was towing along the 16-bit Windows product line, and confused consumers by releasing first Windows 2000 in early 2000 then releasing Windows Millennium in September 2000, the month that Paul Maritz finally gave up and called it quits (

You would think that Bill Gates and Steve Ballmer would have vowed "never again" to repeat the mistakes of Paul Maritz and Windows 95 and Windows 2000, yet that is precisely what they've did exactly again with the long drawn out Windows Vista cycle. You've heard this similar story by now. Like the fog of Cairo, Windows Vista also promised the kitchen sink and to be all things to all people, to include the reincarnated vision of Cairo (which ultimately failed again as "WinFS" and was cut from Vista late into the game), and ended up taking over 5 years to get out the door. Windows XP was released in October 2001, while Windows Vista finally showed up January 2007. For comparison, Apple shipped 5 major releases of Mac OS X in roughly the same timeframe, and Linux made great advances as well.

The similarities don't stop there. Vista was headed up a couple of vice presidents named Brian Valentine and Jim Allchin who were brought in to clean up the Windows 2000 and Windows Millennium mess by shipping Windows XP 2001 to finally unify the two Windows product lines as Paul had intended. Windows 2000 lasted on the market barely a year and a half.

Another similarity is how these vice presidents of Windows don't really stick around when things go wrong. Brian for example was a strange guy, choosing to spend a lot of his time playing hockey and rallying the troops about how this year would be the year they shipped Longhorn (the codename for Vista). One year, 2005 I believe, everyone in the Windows division received, and some people actually wore, T-shirts which said "Year Of The Steer". Like Paul Maritz leaving after Windows 2000, Brian Valentine didn't even wait to see his baby born. On Labour Day weekend 2006, he quietly tipped toed away to after effectively being fired from his job ( Jim Allchin, his boss, waited a few more months before ceremoniously resigning. The people in charge of Windows Vista didn't bother to stick around to hear all the bad reviews.

One final similarity, in the same way that Windows 2000 was quickly replaced by Windows XP the following year, Microsoft has recently hinted at a very accelerated development cycle to rush Windows 7 to users next year to already replace the poorly accepted Windows Vista ( What comes around goes around.

So, given Paul Maritz's track record, you would think he would never work in the industry again. Yet EMC feels it is a wise move to bet VMware's future on this guy! EMC, you have got to be kidding!!!!!!!!

Let me remind EMC of another time when the board of directors of a well known computer company fired its founder and CEO and hired a complete opposite. 1985. Apple. Steve Jobs. He was forced out of the company so that someone from Pepsi (Pepsi?!?!?), then as it is now, second fiddle to Coke. For the next decade, Apple produced boring beige boxes that looked like PCs, cost more than PCs, and had PC-like names such as the "Mac LC 475" and "PowerMac 6100/80". Apple was practically bankrupt by the time Steve was asked to come back to clean up the mess. Since returning 1997 to the company he founded, Apple has innovated and blossomed. EMC seems to have forgotten that history lesson, and as such it would be truly fitting if Apple hired Diane Greene and as many VMware engineers as possible, as soon as possible.

In a relevant piece of news from just this week, Microsoft and Sony and falling over themselves to offer movie rentals and Netflix via their Xbox 360 ( and Playstation 3 ( game consoles. That would not be happening today if not for Apple leading the way with iPod, iTunes, and Apple TV movie rentals. Microsoft had a huge head start with video-on-demand and set-top cable boxes and the Windows CE operating system for embedded devices, and yet all throughout the 1990's when Paul Maritz was in charge of Windows it failed to make anything happen.

If you are still rooting for Paul, may I remind you that he is responsible for such memorable quotes as "embrace, extend, and extinguish" and "cut off Netscape's air supply" (,-Intel-wage-war-of-words/2100-1023_3-217848.html). My favorite Paul Maritz quote is this one: "We have no intention of shipping another bloated OS and shoving it down the throats of our users." ( Good intentions or not, Paul Maritz's actions and words in the long run cost Microsoft billions of dollars in lost sales, in legal fees, caused that whole mess with the Department of Justice, and of course, made the world hate Microsoft that much more. In my opinion, he is not qualified or entitled to run any company.

VMware's Timeline of Doom

With 20/20 hindsight now, given the corrupt and short sighted nature of American business, VMware doomed itself on a path of ultimate destruction five years ago when it got in bed with these morons at EMC in the first place. As VMware gained popularity in the late 1990's and early part of this decade, other competitors joined in the Windows emulation space such as the Macintosh tools company called Connectix, makers of the "Virtual PC for Mac" Windows emulator. VPC/Mac was such an awful product, known by most Mac users to be a painfully slow Windows emulator, that I myself mocked them at Macworld Expo by giving out the "Other Emulators Suck" T-shirts. The lousy performance of VPC/Mac thankfully sent a few customers my way at Macworld at least, as people who needed to run Mac OS and Windows at the same time and didn't care which order they did it in were able to just walk a few feet from their booth to my booth and get the much faster SoftMac emulator from me. Fortuitously for Connectix, in January 2003 Diane's husband and VMware co-founder Mendel gave a lecture at Microsoft campus in Redmond to explain to them the wonders of virtualization. I was at that lecture and thoroughly enjoyed it, as obviously did some Microsoft employees with very deep pockets. Just a few weeks later Microsoft grabbed up Connectix ( Connectix had just released a Windows version of Virtual PC to go up against VMware Workstation, and were hyping a piece of vaporware called "Virtual Server", a promised competitor to VMware Server which was already on the market at the time in 2003.

VMware should have ignored the Connectix move and stuck to its guns of producing the world's best Windows virtualization software. Unfortunately, VMware then rushed to get itself acquired later that same year ( The tit-for-tat war between EMC and Microsoft was now on, ultimately leading to Dianne's premature departure. Connectix selling out when it did, that I can understand. The economy was tanking after 9/11, Connectix was a one-trick pony with a lousy product, so getting Microsoft to write a fat check, any check, was probably one of the greatest jackpots in computer history. VMware on the other hand was already successful, Mendel was a recognized leader in promoting and educating people about virtualization, and VMware owned the virtualization market. I just don't see why VMware needed the money other than that $625 million was probably a hard number to say no to.

The ensuing war between EMC/VMware and Microsoft/Connectix took casualties on both sides, and seems to have been inspired by the 1990's tactics of none other than Paul Maritz. Taking a page out his "cut off their air supply" playbook, VMware fired the first volley in 2005, likely as a response to Virtual PC 2004 and Virtual Server 2005, by making available a free stripped down version of VMware Workstation called VMware Player ( A clever marketing stunt, but mostly unnecessary as VMware Workstation was already available as a free trial download. This egged on Microsoft, which a few months later in July 2006 suddenly declared that its existing Virtual PC 2004 product, which it charged money for, would be given away for free (,1895,1988600,00.asp), a move reminiscent of their 1990's browser war when they stopped selling Internet Explorer and made it free to fend off the much more popular Netscape. A month later, in a stunning act of stupidity, Microsoft then discontinued the awful Virtual PC for Mac product (, which had already slashed in price from $229 to $129, just at a time when Parallels started making a killing in the Mac market and VMware was on its way to eventually releasing VMware Fusion. Instead of fixing a lousy product and cashing in on what is now a lucrative Mac market for Parallels and VMware, Microsoft rolled over and gave up; something that as a Mac user I will never forgive Microsoft for doing.

VMware, baited by Microsoft's announcement of free Virtual PC 2004 immediately upped the ante by declaring that it would give away VMware Server (! Microsoft has since followed suit by declaring that Virtual Server would too, be free ( To summarize what happened, hundreds of millions of dollars worth of buyouts later, all that EMC and Microsoft have to show for it is a childish pricing war involving mission-critical server virtualization software; a scenario that should scare the hell out of every IT department out there. And yet this childish war never needed to happen, as even with Connectix technology Microsoft was never a serious threat to VMware. Hyper-V still puts Microsoft far behind VMware, making EMC's actions that much more tragic.

Sorry VMware, Paul Maritz is no Friend of Intel or Apple or Your Customers

Reading through some old Microsoft anti-trust case testimony, I am struck by this one 1999 New York Times article that shows some of absurd comments that Mr. Maritz made about Apple and Intel. (

    "Microsoft bullied Intel into shelving software work that conflicted with Microsoft's plans and to curb its support for Netscape's technology. To bend Intel to its will, the Government charges, Microsoft threatened to withhold software support for a new generation of Intel microprocessors."

    "Mr. Maritz describes Intel's software work as second-rate development that ''often falls below the high quality standards of Microsoft software.''"

    "Mr. Maritz wrote that Mr. McGeady posed a problem in getting Intel to curb its support for a competing Internet technology, adding, ''Unfortunately he has more I.Q. than most there.''"

And something that is very personal to me, since I was one of the software developers working both on Office 97 and then Mac Office 98 (wrongly called "Mac Office 97" by the New York Times), I know first hand how the Mac product was punted to second-class status for the sake of getting the Windows product out the door first:

    "Maritz cites an E-mail written in November 1996 by the head of Office development to William H. Gates, the Microsoft chairman. The Macintosh ''is perceived as in decay,'' the testimony quotes from the E-mail. ''There is broad resistance within the ranks to doing this release,'' which was Mac Office 97."

While Apple was in a tailspin (thank you Pepsi guy!), Microsoft spun a different story to the public at the time by openly declaring its support for the Mac. Mac Office 98 ultimately did ship, but not before the executives slashed 68000, 68040, and all legacy Mac support from the product, which I found to be unnecessary from the technical standpoint. They did just the bare minimum to pretend to care about Mac, which as an engineer, I found insulting. This helped to convince me to resign from Microsoft in the summer of 1997 and start up my four-year development and Macworld Expo marketing effort of the SoftMac emulator of legacy Macs. Told you this was personal.

So one has to wonder, with VMware gaining popularity on the Mac OS platform these days, and the millions of dollars that Intel has pumped into VMware recently, will Apple and Intel be willing to play ball with VMware now that their former nemesis Paul Maritz is in charge? Of all of the hundreds of executives that Microsoft has had over the years, he is the poster child, he is the face of Microsoft's anti-competitive monopolistic dogma of the 1990's. With a colorful witness like Paul Maritz speaking for it, no wonder the court ruled against Microsoft in November 1999, declaring it a monopoly. I wonder how long he will last at VMware.

I Rest My Case

As I suggested a few weeks ago, VMware could be a popular and profitable thought leader, as it once was. It could do more to publish papers in the field of virtualization, it should embrace open source and open up its products to the community, it should focus on lower end computers in the emerging markets, and hiring Paul Maritz to please Wall Street is not going to take it down such paths. VMware has already doomed itself by following Paul's tactics of slashing prices to try to kill a competitor, despite the fact that when Paul Maritz tried to pull that trick on Netscape a decade ago, Netscape went open source and was reborn as Firefox. And today in 2008, the best browser on the market is not IE6, not IE7, not quite Apple Safari 3.0, but rather the browser that I use on all my of my Macs and PCs is Firefox 3.0 - a free open source product.

It makes the need for open source virtualization that much more timely, because as I said in July 1 posting, "I believe that open source and free virtual machines can match anything that VMware or Microsoft do". Given VMware's turmoil now and Microsoft's latest failure to catch up to them, this rings ever truer now. Virtualization is far too important a basic utility today for the computer using public at large for it to be at the mercy of the closed and proprietary products from these two unpredictable and volatile companies.

After weeks of testing, next posting I will describe the Hyper-V RTM release for Windows Server 2008 as tested on my Mac Pro and my recently built quad-core server machines, point out the design flaws it carries over from Virtual PC and Virtual Server, a with further look at VMware Workstation 6.0, and you will understand my conclusion that VMware had no reason to worry.

By the way, if you liked reading my thoughts about Beijing last time, I highly recommend that you watch Ted Koppel's show "The People's Republic of Capitalism" on Discovery Channel (, which he filmed over several months in the inland city of Chongqing. For people like me who have only recently opened their eyes to China, it is a fascinating look at how capitalism can and does thrive in the absence of American style democracy, and how sometimes you have to take the long-term approach to pull millions of people out of poverty and build what will soon be the world's largest economy instead of operating in a knee-jerk quarter-to-quarter mentality as America's failing economy does.

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