Shake-Up at VMware as COO Eschenbach Leaves for Sequoia Capital
Arik Hesseldahl / Re/code :
Context & Ripple Effects
Eschenbach exits VMware at a fraught moment: the company is being absorbed into the Dell-EMC combination, where shareholders have been demanding changes to the buyout terms, including a VMware stock buyback. Losing the COO mid-integration removes one of the operators steering the virtualization business through that restructuring.
The longer arc makes this departure notable: Eschenbach used Sequoia as a springboard back into operations, eventually running Workday before stepping down as its CEO. And VMware's own bench kept proving the point — years later the board promoted another COO, Raghu Raghuram, to chief executive after Pat Gelsinger left for Intel.
First-order effects
- VMware must cover the COO seat while executing the Dell-EMC integration under shareholder pressure, a double leadership strain at once.
- Sequoia Capital adds an enterprise-software operator with public-company scale experience to its partnership.
Second-order effects
- Sequoia's ability to recruit sitting COOs of major infrastructure companies strengthens its pitch to enterprise founders who want operating help, not just capital.
- VMware's succession churn — Gelsinger out, then Raghuram elevated from the COO role — shows how the COO position became the de facto CEO pipeline, raising the stakes of every vacancy there.
Third-order effects
- If the pattern holds, venture firms function less as a retirement from operations than as a waystation: operators cycle from running companies into investing and back, as Eschenbach's VMware-to-Sequoia-to-Workday path demonstrates.
- For companies in the middle of ownership transitions like VMware's, executive departures to investors blur the line between operator and acquirer-side advisor — a governance wrinkle boards increasingly have to price in.
The trend: Top enterprise-software executives are treating venture capital as a two-way door, moving from operating seats into firms like Sequoia and back into CEO roles.