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With VMware and Citrix both pushing into the data center with their virtualization products, I had the chance to chat with Simon Crosby briefly about Citrix’s new portfolio of cloud products. I walked away impressed with Citrix’s plan of attack when it comes to helping providers make cloud computing compelling for enterprise customers. Citrix’s approach won’t solve issues related to the physical location of data or problems with varied platforms, but does address compliance, security and latency issues.

Earlier this year, I wrote that enterprises aren’t ready to trust the cloud. It was nice to hear Crosby agree. “It’s very early for enterprise consumption of cloud services other than delivering their own,” he said. “That means there’s a tremendous opportunity at Citrix to leverage our channel strength and to make clouds real to our customers.”

The nitty gritty of how Citrix plans to do that show that Citrix has a good idea of what enterprise cloud providers will need. Citrix plans to charge cloud providers for the products based on actual usage — just like electricity. Citrix is bundling its NetScaler appliance for load balancing, WANScaler for network optimization and a management console, together with a version of XenServer and will charge third-party cloud providers per transaction.

This move toward usage pricing isn’t new to some of the actual infrastructure vendors such as Amazon’s Ec2, or even to Platform as a Service providers such as Bungee Labs, which also charge based on usage, rather than asking a licensing or monthly fee — but it’s an important financial consideration for companies trying to build out these services. There’s a high up-front cost with building out a cloud, but the revenue trickles in. Because the infrastructure side of the equation is a fairly low-margin business, setting up the building blocks of the cloud with as little capital outlay as possible is good for cloud vendors.

That leads me to the next consideration for Citrix, one Crosby hinted at but wouldn’t comment on specifically. Most people I talk to believe the building blocks of the cloud will be software-based rather than hardware-based. It doesn’t make sense to give people an appliance and then charge them on a per-use basis. It’s also easier for cloud providers to see into and manage a cloud if the layers they are managing are software, so I would expect more from Citrix on the software front in time.

The final takeaway worth mentioning from the interview is Citrix’s plans sound very enterprise friendly  — with heterogeneous management capabilities with Microsoft’s Hyper-V and the ability to ensure SLAs. Crosby’s stated goal is end-to-end management of the cloud. That’s jargon, but when delivering computing services over a network there are actually two ends — and Citrix means to have its products in both.

For example, we’ve talked about how WAN optimization will play a role in visibility and reliability of the cloud. If Citrix gear is providing visibility on one end to the cloud provider (and Citrix is pricing the products to move on the provider side), it has a good shot of offering equipment to provide visibility on the other end as well.

If Citrix can support usage-based pricing and offer its level of functionality as software, it can make even bigger inroads with cloud providers (most third-party clouds already use XenServer as the hypervisor). Those cloud providers will then help sell Citrix its gear to their customers who can use Xen or Microsoft’s Hyper-V virtualization products. Enterprises will eventually accept the cloud. Let’s see if they’ll like Citrix’s vision of it.

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Wow…this came as a complete and total surprise. VMware has announced that Diane Greene, president and CEO of the hot virtualization company is leaving and will be replaced by Paul Maritz, whose company, Pi Corp., was acquired by EMC Corp. back in February. I am flummoxed by this move since VMware has been on an upswing and despite increased competition, has been pretty bullish about the future.

Greene didn’t give any hint to her departure when I met her at a recent tech gathering. More importantly, when I was hanging out with VMware co-founder (and Greene’s spouse) Mendel Rosenblum at our Structure 08 conference, he pointed to rosy skies ahead. At the bottom of the press release announcing her departure, however, is information indicating that the company might be facing a rough 2008, which explains the sudden change in management.

VMware expects to announce earnings for the quarter ended June 30, 2008 as scheduled on July 22, 2008 at 2pm PDT. On that call Paul will make observations about the second half of 2008. While VMware is not updating guidance for Q2, we expect revenues for the full year of 2008 will be modestly below the previous guidance of 50% growth over 2007.

The markets aren’t too happy — the stock has tanked more than 30 percent already to as low as $36.51 a share. Shares of EMC are taking a pounding as well, falling as much as 13 percent to change hands for $13.18.

I think something big is going on — no CEO and co-founder just up and quits the company. The numbers might be worse than they seem. Did Greene pay the price for the missed numbers or is there something else going on? 

I couldn’t help but notice the fact that Joe Tucci, chairman of VMware’s board and CEO of EMC, was all over the press release announcing Greene’s departure, with not so much as a word from her, Mendel or any of the VMware co-founders. Of course, the fact that Diana’s replacement, Maritz, works for EMC only adds to the mystery.

By way of background, Maritz retired from Microsoft in 2000 and in 2003 started Pi Corp., a software startup focused on building cloud-based solutions for new ways of doing personal information management. Pi Corp. was acquired by EMC last February, and Maritz became president of EMC’s cloud division. Greene and her four co-founders launched VMware back in 1998. The road leading up to the company’s blockbuster IPO and subsequent stock market darling status was a long one.

Update from Stacey: Greene’s departure is likely more politically than financially motivated, according to sources in the virtualization community. They point to friction between Greene and her bosses at EMC, as well as EMC’s worries about Greene as the CEO of a publicly traded company as the reasons behind her departure. Most people suspect we’ll see her at the helm of another startup within a few months. VCs will certainly be calling her — if not today, then tomorrow.

For a look at how open source figures into the story, check out OStatic.