By Nicholas Carlson, 12:20 PM on Tue Jul 8 2008, 2,521 views (Edit, to draft, Top, Slurp)

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Palo Alto server virtualization software maker VMware'scofounder Diane Greene resigned today, effective immediately. Virtualization is technology that allows one server to operate like its two or more, and it was thought to be a hot growth sector. Key word being "was." The company, which EMC spun off in an IPO only last August, also lowered its revenue growth expectations for the quarter below 50 percent.

Company shares are down 30 percent so far on the day. The people who get paid enough to watch and report on the virtualization industry say it's Microsoft that has put the squeeze on VMware, by building virtualization features into Windows. Gartner analyst Thomas Bittman, for example, says Microsoft's virtualization features — it launched "Hyper-V" in June — will probably take over the virtualization market among small to medium-sized enterprises. Greene founded VMware in 1998 and sold it to EMC in 2003. The experience has likely made her wealthy, but not happy. (Photo by AP/Risberg)