virtualization.info

As expected, today VMware confirmed the acquisition of Zimbra from Yahoo.
The company didn’t disclose the terms of the deal but All Things D reports that we are talking about something more than $100M.

This is the acquisition #14 and like no other (not even the SpringSource one) this seems far, far away from the roots of VMware.

As already mentioned in the previous coverage of the deal, Zimbra is an online/offline collaboration suite which Yahoo acquired in September 2007 for $350M in cash and that competes with Software-as-a-Service (SaaS) PIMs offered by Google or Zoho for example.
Zimbra also offers an open source mail client that competes with products such as Microsoft Office and Mozilla Thunderbird.
Yahoo is rumored to be trying to sell it since September 2008.

What VMware is going to do with Zimbra? Something that is completely unrelated to virtualization: it’s going to continue to serve the 55 million mailboxes that customers created today and further develop the suite.
If there’s a more organic vision behind this acquisition, the company definitively failed to clarify it.

The only thing that the VMware press announcement and the corporate blog post say is that Zimbra will be “integrated”  and “optimized” in/for the vCloud offering. But Zimbra already is available as a virtual appliance, as the VMware CTO reminds in his post.
What sort of integration and optimization are they looking for? For sure the first step is turning the Zimbra virtual appliance into a vApp, with the critical metadata to enforce SLAs and security policies. But does that need an acquisition?

What the company communications let understand is that VMware now sees offering core applications like email a key piece of their strategy. And this is part of the real big news.

VMware has a strong credibility in the enterprise market because it owns a formidable virtualization platform, but holds zero pieces at the platform (hence the SpringSource move) and application level.
This basically means that many other acquisitions will follow, because mail is not the only core application that companies need.

Under the Paul Maritz direction, who replaced the founder Diane Greene in July 2008, the new VMware is now evidently trying to build a complete computing stack.
Maritz has been a top executive in Microsoft, working side by side with Bill Gates and Steve Ballmer, so he may have an idea or two on how to build “MS 2010 Cloud Edition”. His former colleague in Redmond and now COO in VMware, Tod Nielsen, is here to help.
At this point it won’t be too surprising if the company would be interested in an operating system too, which would turn Red Hat into a potential acquisition target (Novell is out of this potential game because of its tight partnership with Microsoft).

The other part of the big news lies in one of the first sentences of the press announcement:

This acquisition will further VMware’s mission of taking complexity out of the datacenter, desktop, application development and core IT services, and delivering a fundamentally more efficient and new approach to IT.

This is a brand new mission for VMware. At the last VMworld the company introduced the idea of “taking complexity out of the data center”, but this a full declaration of independence from virtualization.

With such mission the company can do pretty much anything. It can go up to mission-critical application hosting and down to hardware management. Which is exactly what virtualization.info suggested almost a year ago with the article VMware is becoming an infrastructure management company.

All the above defines a new course for VMware. It may brings the company to the next level, but it certainly introduces some new problems:

1. VMware now has to compete with Microsoft on multiple fronts. And just because it’s a winner at the virtualization level it doesn’t mean that it will be elsewhere.
2. VMware now has to develop, deliver and innovate on many new fronts. They may be too many to make a difference and offer the excellence that customers are used to.