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VMware Adds Former Skype Head Tony Bates to Board

Another move in a corporate chess game.

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What’s behind software company VMware’s naming of Tony Bates, the president of video camera outfit GoPro and a former Microsoft executive, to its board of directors?

 Tony Bates
Tony Bates

Within moments of the announcement, VMware insiders rang me up to question whether the board changes suggested EMC CEO Joe Tucci was positioning Bates to take over the CEO spot from current CEO Pat Gelsinger as part of a series of moves on the corporate chess board.

The timing is interesting. VMware is 81 percent owned by EMC, which, as we all know, is in the process of being gobbled up by privately held computing giant Dell in a massive transaction that’s expected to close this fall. A portion of VMware shares trade on the New York Stock Exchange, and while it has a small measure of independence from the parent, EMC effectively controls 97 percent of the company’s voting power.

Behind the deal drama, Tucci was said to have been annoyed with Gelsinger’s decision to walk away from Virtustream, a joint venture between the two that was announced eight days after the Dell buyout. The joint venture proved unpopular with EMC and VMware shareholders if for no reason other than it made the Dell buyout deal appear more complicated.

And while there’s no hard evidence to show that Gelsinger might be headed for the exits, there has been a lot of movement in recent weeks within the senior ranks at EMC and the several companies within its federation. Last month, EMC CFO Zane Rowe was moved over to be the CFO of VMware, replacing Jonathan Chadwick. And Chad Sakac, another EMC exec, was promoted to head up VCE.

Meanwhile, Bates is a widely respected exec who was CEO of Skype before its sale to Microsoft and is now president at GoPro. He joined GoPro as its president in 2014. But he earned his operational reputation as president at Skype, which he helmed through its 2011 buyout by Microsoft. After that, he landed a role as the software giant’s executive VP of business development and evangelism. Before Satya Nadella was named to replace Steve Ballmer, Bates was also high on the list of potential Microsoft CEO successors.

And here’s another wrinkle: Bates is joining the board alongside Donald Carty, who also sits on the board of EMC. Carty first joined the EMC board a year ago as part of an agreement with Elliott Management, the activist investment firm that initially pushed the company to break up, but then supported its plan to sell out to Dell. And who’s Carty? A former vice-chairman and CFO of Dell.

If nothing else, it seems that with eight months remaining before Dell closes on its proposed buyout of EMC, Tucci is moving to reassert as much control over VMware as he can.

Correction: We initially said that Bates hadn’t been a CEO. He was, in fact, briefly CEO of Skype before its 2011 sale to Microsoft.

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