VMware to acquire Zimbra? – UPDATED

Posted by virtualization.info Staff   |   Monday, January 4th, 2010   |  

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For the ones that don’t know it, 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.

The platform didn’t get much traction compared to the competitors above and Yahoo is rumored to be trying to sell it since September 2008.

Now All Things Digital, the tech division of the The Wall Street Journal, is reporting that VMware is acquiring Zimbra.

While this is seems extremely unlikely, WSJ is very reliable news source and Kara Swisher reports confirmations from multiple sources.
So, assuming this rumor will be confirmed as true, the question is: why a virtualization vendor like VMware would want a SaaS collaboration suite like Zimbra?

Possibly because, as virtualization.info already suggested, VMware may be working to compete with Google.
The new CEO Paul Maritz, which has been a top executive in Microsoft for many years, may envision a new VMware which offers IaaS, PaaS (see the SpringSource acquisition) and SaaS technologies all together.

Problem is that VMware has a solid reputation as a virtualization company. And a virtualization company which supports any platform and any application, no matter what the vendor is. 
So far VMware has been pretty good at keeping this reputation, despite its parent company EMC.

But the more VMware “expands up the stack”, to use the Swisher’s words, the more partners it turns into competitors.
Additionally, no matter how respected VMware is in the IT world at today: any product it will launch besides hardware virtualization platforms may receive a skeptical welcome and just turn away the core customer base. The reactions obtained after the SpringSource acquisition are an example.

Again, assuming this acquisition is confirmed, it is legit to ask: is the company moving this way because this is the new right way to evolve for VMware, or just because this is the best way the company believes it could survive a future where Microsoft turned virtualization into a real OS commodity and Google persuaded the world to embrace HTML5 and just release web applications?

Update: All Things D further confirms the rumor and informs that Yahoo and VMware will announce the sale tomorrow, Jan. 12, 2010.
It seems that VMware paid more than $100M to have Zimbra.

The acquisition is stranger than ever because the intellectual property of Zimbra technology will remain at Yahoo, which will give it back to VMware over time.



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