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VMware taps Raghuram as CEO, triggering Poonen's exit

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By Jessica DiNapoli and Stephen Nellis

(Reuters) - VMware Inc on Wednesday named its co-chief operating officer Raghu Raghuram as its new chief executive, prompting Sanjay Poonen, the business software company's other co-COO, who was vying for the top job, to depart.

Raghuram is tasked with guiding VMware as a company free from majority owner Dell Technologies Inc, which last month said it would spin off its 81% stake in the cloud computing giant in exchange for a special cash dividend of $9.7 billion.

Raghuram's predecessor, Pat Gelsinger, was named Intel Corp's chief executive in February.

Raghuram, an 18-year veteran of VMWare, was offered the CEO job after external candidates turned it down, people familiar with the matter said. VMware declined to comment on the other candidates.

VMware makes software that helps business customers spread run their software on vast fleets of physical computers in data centers. Gelsinger helped VMware navigate the transition from the era in which most big businesses owned their own data centers to the era of cloud computing, in which companies rent computing power from vendors such as Amazon Web Services or Microsoft Corp's Azure.

Gelsinger also inked partnership deals to make VMware's technology work with those vendors.

In an interview with Reuters, Raghuram said he planned to double down on that strategy by helping VMware customers move their software among multiple cloud providers as well as their own data centers.

"Embedded in the VMware DNA is this Switzerland mentality" of working with all kinds of computing providers, Raghuram said. "What I hope to do is accelerate it even further.”

"I will be cheering on the company's success, as I embark on my next adventure," Poonen said in a statement. He did not provide details on what he would do next.

VMware also said that Sumit Dhawan, a senior vice president, will be elevated to the role of president. Zane Rowe, who has served as VMware's interim chief executive while the board undertook a search, will return to his previous job as the company's chief financial officer.

VMware, which plans to release its full fiscal first-quarter 2022 financial results on May 27, also released preliminary results on Wednesday. The company said it expected $2.99 billion in fiscal first-quarter revenue and adjusted profits of $1.76 per share. Analysts are expecting $2.91 billion in sales and $1.50 in adjusted earnings per share, according to Refinitiv data as of May 11.

(Reporting by Jessica DiNapoli in New York and Stephen Nellis in San Francisco. Editing by Gerry Doyle)