EMC Search for New CEO Is Said to Pit Goulden Against Gelsinger

EMC Corp. Chief Financial Officer David Goulden and fellow executive Pat Gelsinger are the early front runners in a race to succeed Chief Executive Officer Joe Tucci, two people with knowledge with the matter said.

Tucci, 63, who plans to step down as CEO of the storage provider after next year, has considered at least four candidates, Gelsinger, an EMC president, said in an interview last month. Those are Gelsinger, Goulden, Howard Elias, president of EMC’s services unit, and Paul Maritz, CEO of VMware Inc., majority owned by EMC. Maritz wants to stay at VMware, and Elias isn’t a serious contender, said the people, who asked for anonymity because the search is private.

Goulden, 52, is a nine-year EMC veteran who previously oversaw sales and led the purchase of VMware. Tucci hired Gelsinger, 50, in 2009 from Intel Corp., where he ran the unit that makes chips for businesses and served as chief technology officer. The next CEO will navigate EMC as customers shift toward cloud computing, the delivery of storage and software over the Internet, rather than through their own machines.

“The question is: Do they want someone a little stronger on the product technology side, which would be Pat, or someone who really knows the place and has done well on the execution side, and that would be David,” said Stephen Jue, a senior research analyst at RCM Capital Management in San Francisco, which has more than 18 million EMC shares. He concurs that Gelsinger and Goulden are the leading contenders.

Maritz, Elias

Maritz, the No. 3 executive at Microsoft Corp. before he left in 2000, isn’t interested in the top job at EMC, according to two people familiar with his thinking. While Elias is well regarded for his operational chops, his skills don’t match those of other candidates, people said.

Tucci hasn’t made a selection and could opt to stay on as CEO, two people said. CEO since 2001, Tucci may also consider Michael Capellas, the former CEO of First Data Corp., MCI Inc. and Compaq Computer Corp., who is now overseeing an EMC joint venture, three people said.

“We’re fortunate to have a very deep and talented executive team,” Dave Farmer, a spokesman for Hopkinton, Massachusetts-based EMC, said in an e-mailed statement. “As you would imagine, we have a robust transition planning process under way.” Grace Trent, a spokeswoman for Capellas, didn’t immediately return a message seeking comment.

Gelsinger and Goulden are a study in contrasts. Gelsinger, who as president of the information infrastructure business oversees most EMC products, started at Intel as a chip designer and was mentored by former CEO Andy Grove. He rose to lead what was then the chipmaker’s biggest business: enterprise computing.

Technologist Gelsinger

Gelsinger’s technical expertise would help EMC manage its broad array of data center products in areas including storage, security, data analysis and server virtualization, said Brian Marshall, an analyst at Gleacher & Co. in San Francisco.

Born and raised in Pennsylvania Dutch country near Reading, Gelsinger has a master’s degree in electrical engineering from Stanford University and holds six patents. He’s also a devout Christian who has written on faith and work.

“I will be a Christian husband, family man and businessman,” he wrote in “Balancing Your Family, Faith and Work.” “I will use every resource God provides me to carry out his work on earth.”

He’s not a natural salesman like Tucci and prefers a more measured approach to decision making, drawing heavily on data, one of the people said.

Three-Ring Binders

The CEO gig at EMC would be something of a second chance for Gelsinger, who was considered a possible CEO candidate at Intel when he left in 2009.

Gelsinger told reporters in a roundtable last year that he was fired for failing to ship Intel’s Larrabee chip, which was designed to help the company take on Nvidia Corp. and Advanced Micro Devices Inc. in the market for high-end graphics. The company canceled plans to bring Larrabee to market that year.

Goulden, who hails from the U.K., excels at operations, and is an energetic manager who can motivate teams to perform even mundane tasks, the people said. He has a bachelor’s degree in physics and an executive MBA from Cranfield School of Management in England.

Goulden keeps tome-sized three-ring binders handy, with detailed accounts of each part of the business, one person said.

Like Tucci, Goulden worked at Unisys, then a mainframe computer maker, in the 1980s, and moved to Wang Laboratories, the maker of minicomputers and word-processing machines, in 1990.

Last Car in Lot

Tucci sought Goulden for his staff at Wang after noticing that one car -- Goulden’s -- was always in the Wang parking lot even later than his own, according to a person familiar with the executives. Tucci became CEO at Wang, while Goulden held leadership roles in operations, marketing, corporate development and acquisitions.

In 2002, Tucci convinced Goulden to join him at EMC. After being named chief financial officer in 2006, Goulden quickly impressed analysts and colleagues with how quickly he learned the job, despite his lack of a background at a large accounting firm, one person said.

Tucci faced his own challenges when he became CEO in 2001, just as the dot-com bubble was bursting. He steered the company through a period of job cuts and plummeting revenue. EMC has returned to record sales and profit, and maintained its role as the world’s biggest maker of storage computers.

Speaking at a conference in New York last month, Tucci reiterated an 18-month-old plan to step down as CEO after 2012 and move to the role of executive chairman. He reiterated that he’s grooming internal candidates to replace him.

Change Afoot

Tucci’s planned transition comes as the industry enters “the biggest change we’ve faced yet to date,” he said at the conference. He was referring to the switch to cloud computing, whereby companies depend on remote, server-laden data centers for many tasks, and rely less on their own machines.

That’s fueling demand for cloud-ready software and hardware made by EMC and rivals including International Business Machines Corp. and Hewlett-Packard Co.

“This is a massive transition,” said Brent Bracelin, an analyst at Pacific Crest Securities in Portland, Oregon. “The shift to cloud and virtualization means the whole of enterprise information technology is going to be re-architected over the next decade. EMC has done a great job so far, but there’s still a lot of risk out there.”

Tucci’s successor will also need to weigh whether to continue his strategy of acquiring smaller companies or taking more drastic moves, such as making big acquisitions or merging with a company such as Hewlett-Packard in order to vault EMC into the ranks of the world’s biggest technology providers.

‘Sharp As Hell’

Earlier in the decade, EMC held discussions with Dell Inc. about Dell acquiring the company, one person said. When that fell through, Tucci was interested in selling to Cisco Systems Inc., the person said. Neither deal materialized, and now EMC has become too large to be acquired easily.

As EMC girds for customers’ changing needs, it may benefit more from Gelsinger’s vision and technical knowledge than Goulden’s mastery of finance and acquisition integration, said Pacific Crest’s Bracelin and Marshall at Gleacher & Co.

“Between Gelsinger and Goulden, it’s a no-brainer--it’s Pat Gelsinger all around,” Marshall said. “He’s very aggressive, he has the support of the troops, and he’s sharp as hell.”

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