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VMware to Acquire Zimbra

VMware (NYSE:VMW) has announced it will acquire open-source e-mail and collaboration software company Zimbra from Yahoo (NASDAQ:YHOO), paving the way for a potential rival to Microsoft’s Exchange e-mail and collaboration empire. The deal follows a week of rumors that VMware was targeting the open-source company amid speculation that if the deal went through it could […]

Written By

Jessica Davis

Jan 12, 2010

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VMware (NYSE:VMW) has announced it will acquire open-source e-mail and
collaboration software company Zimbra from Yahoo (NASDAQ:YHOO),
paving the way for a potential rival to Microsoft’s Exchange e-mail and
collaboration empire.
The deal follows a week of rumors that VMware was targeting the open-source
company amid speculation that if the deal went through it could potentially threaten
Microsoft Exchange’s stronghold in business environments.

VMware’s buy of Zimbra may enable the creation of an e-mail platform that could
be packaged as a software appliance, hosted by MSPs and SAAS providers, and
added onto by third-party developers writing to APIs.

VMware seemed to acknowledge the possibility in its announcement of the deal.
VMware calls Zimbra “modern, flexible architecture designed for virtualization
and cloud-scale infrastructure … [but] provides substantially lower total cost
of ownership than traditional solutions.”

VMware says Zimbra offers full enterprise features, interoperability with
legacy e-mail environments and is currently in use by thousands in on-premises
installations at small and medium-size businesses and distributed enterprises.

"Over the coming years, we expect more organizations, especially small and
medium-size businesses, to increasingly buy core IT solutions that deliver
cloud-like simplicity in end-user and operational experience," says Brian
Byun, vice president and general manager for cloud services at VMware, in a
prepared statement.

"Zimbra is a great example of the type of scalable ‘cloud era’ solutions
that can span smaller, on-premises implementations to the cloud. It will be a
building block in an expanding portfolio of solutions that can be offered as a
virtual appliance or by a cloud service provider. We are excited to welcome the
Zimbra team and community to the VMware family."

VMware says it plans to support existing Zimbra products and open-source
efforts while further optimizing Zimbra products for vSphere-based cloud
infrastructure, alongside Microsoft, IBM and
other messaging and collaboration solutions.

Under the terms of the agreement, VMware will purchase all Zimbra technology
and intellectual property. Yahoo will retain the right to continue using Zimbra
technology in its communications services, including Yahoo Mail and Yahoo
Calendar.

The acquisition is expected to close by the end of March. Financial details
were not disclosed.

SugarCRM CEO Larry Augustin notes that
Zimbra marks VMware’s second acquisition since Paul Maritz took the helm of the
company, and the second open-source software company. He believes that future
VMware acquisitions may follow a similar pattern—open-source software higher up
in the application stack that can be packaged to be offered as a service by IT
service providers.

"For example, why not a Web content management system like Drupal or
DotNetNuke?" he asks. "Both are very popular, as service provider
applications run on cloud services infrastructure. How about a Wiki platform
like MindTouch? Basically, I would look for anything that runs at a service
provider, on virtualized infrastructure and is a SAAS service that a service
provider can offer."

VMware to Acquire Zimbra

Jessica Davis

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