EMPLOYMENT AGREEMENT

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Agreement is entered into as of July 26, 2007 by and among VMware, Inc. (the “Company”), Diane B. Greene (“Executive”) and EMC Corporation (“EMC”), solely with respect to its obligations as specified in Section 8.

1. Duties and Scope of Employment.

(a) Positions and Duties. For the duration of the Employment Term (as defined in Section 3), Executive will serve as President and Chief Executive Officer of the Company reporting to the Company’s Board of Directors (the “Board”), and as a member of the Board. Effective upon the date on which the first Form S-1 with respect to Class A common stock of the Company becomes effective, Executive will cease to be an officer of EMC. Executive will render such business and professional services in the performance of her duties, consistent with Executive’s position within the Company, as will reasonably be assigned to her by the Board.

(b) Board Membership. Upon the termination of Executive’s employment for any reason, Executive will be deemed to have resigned from the Board (and any boards of subsidiaries) voluntarily, without any further required action by the Executive, as of the end of the Executive’s employment, and Executive, at the Board’s request, will execute any documents necessary to reflect her resignation.

(c) Obligations. For the duration of the Employment Term, Executive will devote Executive’s full business efforts and time to the Company and will use good faith efforts to discharge Executive’s obligations under this Agreement to the best of Executive’s ability. For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the Board; provided, however, that Executive may, without the approval of the Board, continue to serve as a director of Intuit Inc. and may also serve in any capacity with any civic, educational, or charitable organization, provided such services do not interfere with Executive’s obligations to the Company.

2. At-Will Employment. Executive and the Company agree that Executive’s employment with the Company constitutes “at-will” employment. Executive and the Company acknowledge that this employment relationship and the Employment Term may be terminated by either party, with or without good cause or for any or no cause, at the option either of the Company or Executive; provided that any termination of Executive’s employment and the Employment Term (other than by reason of her death), shall be subject to the giving of thirty (30) days written notice by the party initiating the termination. However, as described in this Agreement, Executive may be entitled to particular treatment of her equity compensation depending upon the circumstances of Executive’s termination of employment.

3. Term of Agreement. Except as provided herein, this Agreement will have a one year term (the “Employment Term”) commencing on the date hereof, provided, however, that commencing on the first anniversary of the date hereof and on each anniversary thereafter, the Employment Term shall automatically be extended for one additional year unless, not later than 90-days prior to any such anniversary date either party shall have given notice that it does not wish to extend this Agreement. In the event that the Employment Term expires following delivery by either party of a notice of non-renewal as described in the preceding sentence, Executive’s continued employment with the Company will be on an “at-will” basis and neither the Company nor Executive will have continuing obligations under the Agreement following such expiration except as provided in Section 8.

4. Compensation.

(a) Base Salary. During the Employment Term and effective as of June 1, 2007, the Company will pay Executive an annual salary of $750,000 as compensation for her services (such annual salary, as is then effective, to be referred to herein as “Base Salary”). The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices. Executive’s salary will be subject to review by the Corporate Governance/Compensation Committee of the Board (the “Committee”), and any adjustments will be made in the discretion of the Committee. Notwithstanding the foregoing, the Base Salary will not be reduced other than pursuant to a reduction that also is applied to all other executive officers of the Company and that reduces the Base Salary by a percentage reduction that is no greater than the lowest percentage reduction applied to any other executive officer.

(b) Annual Incentive. Executive will be eligible for bonuses, pursuant to the Company’s bonus policies applicable to senior executives of the Company, that will have an aggregate annual target of $750,000. The amount of the bonus paid to the Executive, if any, shall be based on (i) Executive’s attainment of individual performance objectives, established by the Committee, as well as (ii) the Company’s attainment of certain financial objectives as approved by the Committee.

(c) Long-Term Incentives. In June 2007, Executive was granted nonqualified stock options to purchase 1,000,000 shares of the Company’s Class A common stock, which options will vest 25% on the first anniversary of the grant date and ratably in equal monthly installments beginning on the thirteenth month after the grant date and ending on the fourth anniversary of the grant date (the “VMware Options”), subject to Executive’s continued employment with the Company except as set forth in Section 8 hereof. The VMware Options shall be subject to the terms and conditions of the Company’s 2007 Equity and Incentive Plan and the form of option agreement pursuant to which the VMware Options were granted, except as otherwise set forth in Section 8 hereof.

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5. Employee Benefits. Executive will be eligible to participate in the Company’s employee benefit plans, policies and arrangements that are applicable to other executive officers of the Company, as such plans, policies and arrangements may exist from time to time. Executive will be entitled to receive annual vacation in accordance with Company policy for other senior executive officers.

6. Expenses. The Company will reimburse Executive for reasonable travel, entertainment, and other expenses incurred by Executive in the furtherance of the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.

7. Termination of Employment. In the event Executive’s employment with the Company terminates for any reason, Executive will be entitled to any (a) unpaid Base Salary accrued up to the effective date of termination, (b) unpaid, but earned and accrued annual incentive for any completed fiscal year as of her termination of employment, (c) pay for accrued but unused vacation that the Company is legally obligated to pay Executive, (d) benefits or compensation as provided under the terms of any employee benefit and compensation agreements or plans applicable to Executive, (e) unreimbursed business expenses required to be reimbursed to Executive, and (f) rights to indemnification Executive may have under the Company’s Articles of Incorporation, Bylaws or separate indemnification agreement, as applicable. In addition, with respect to certain terminations of employment, Executive will be entitled to the treatment of certain equity compensation as specified in Section 8 with respect to such event.

8. Treatment of Equity Upon Certain Terminations.

(a) Termination On or Prior to June 8, 2008 by Death or Disability. Upon the termination of Executive’s employment by reason of her death or disability, Executive shall be entitled to such vesting and exercisability of her VMware and EMC equity awards as provided under the applicable plans and agreements, provided that if such termination occurs on or prior to June 8, 2008, not less than 25% of the VMware Options will vest and shall remain exercisable for a period of three years following such termination.

(b) Termination Without Cause or for Good Reason. In the event Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason at any time, then (i) Executive shall receive vesting credit on all equity awards granted by the Company to Executive and by EMC to Executive as if she had remained employed through the following IPO Anniversary Date (as defined below), meaning that (A) time-based vesting conditions shall be given immediate effect and (B) awards subject to performance-based vesting conditions or eligible for full or partial performance-based accelerated vesting based on any periods (e.g., fiscal years) ending prior to the following IPO Anniversary Date shall remain outstanding until the end of

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such period (or, if later, until the determination of performance for such period), at which time Executive will vest in such awards if the applicable performance goals are attained; provided that all Company and EMC options which are vested at such termination, or which would become vested as a result of such vesting credit under this clause (i), shall become immediately exercisable and shall remain exercisable for a period of three years following such termination (or for the remaining option term, if shorter); and (ii) if such termination is within two years following a Change in Control all equity awards granted by the Company to Executive and by EMC to Executive shall become fully vested and, if applicable, exercisable, as of the effective date of termination and shall remain exercisable for a period of three years following such termination of employment (or for the remaining option term, if shorter). For purposes of this Section 8(b), “IPO Anniversary Date” shall mean each anniversary of the pricing date of the Company’s initial public offering.

(c) No Duty of Mitigation; Sole Remedy. Executive will not be required to mitigate the amount of any compensation contemplated by this Agreement, nor will any earnings that Executive may receive from any other source reduce any such compensation. Executive agrees that the provisions of Section 7 and this Section 8 shall be Executive’s sole and exclusive remedy against the Company and its Affiliates in the event of a termination of her employment.

9. Definitions.

(a) Affiliate. For purposes of this Agreement, Affiliate means EMC and any entity controlled by the Company or by EMC.