One result was the Cisco Nexus 1000V, a distributed virtual software switch, an integrated option in the VMware infrastructure. On September 16, 2008, VMware announced a collaboration with Cisco Systems. On September 10, 2008, Mendel Rosenblum, the company's co-founder, chief scientist, and the husband of Diane Greene, resigned. Greene had been CEO since the company's founding, ten years earlier.

On July 8, 2008, after disappointing financial performance, the board of directors fired VMware co-founder, president and CEO Diane Greene, who was replaced by Paul Maritz, a retired 14-year Microsoft veteran who was heading EMC's cloud computing business unit. Shares were priced at US$29 per share and closed the day at US$51. On August 14, 2007, EMC sold 15% of VMware to the public via an initial public offering. On January 9, 2004, under the terms of the definitive agreement announced on December 15, 2003, EMC (now Dell EMC) acquired the company with $625 million in cash. In 2003, VMware launched VMware Virtual Center, vMotion, and Virtual Symmetric Multi-Processing (SMP) technology. The first product, VMware Workstation, was delivered in May 1999, and the company entered the server market in 2001 with VMware GSX Server (hosted) and VMware ESX Server (hostless).

The company was launched officially early in the second year, in February 1999, at the DEMO Conference organized by Chris Shipley. For the first year, VMware operated in stealth mode, with roughly 20 employees by the end of 1998. Edouard Bugnion remained the chief architect and CTO of VMware until 2005, and went on to found Nuova Systems (now part of Cisco).

Greene and Rosenblum were both graduate students at the University of California, Berkeley. In 1998, VMware was founded by Diane Greene, Mendel Rosenblum, Scott Devine, Edward Wang and Edouard Bugnion.

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