Company Expands vCloud Portfolio with Next Generation Email and Collaboration SoftwarePALO ALTO, Calif., January 12, 2010 — VMware, Inc. (NYSE: VMW), the global leader in virtualization solutions from the desktop through the datacenter and to the cloud, today announced that it has entered into a definitive agreement to acquire Zimbra, a leading vendor of email and collaboration software, from Yahoo! Inc.
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.
Zimbra is a leading open source email and collaboration solution with over 55 million mailboxes. As an independent Yahoo! product division, Zimbra achieved 2009 mailbox growth of 86% overall and 165% among small and medium business customers.
Based on a modern, flexible architecture designed for virtualization and cloud-scale infrastructure, the Zimbra technology provides substantially lower total cost of ownership than traditional solutions. Zimbra products offer a full enterprise feature set, excellent interoperability with legacy email environments and have been deployed across small and large environments; as on-premise software at thousands of small and medium businesses, distributed enterprises, and as a hosted service at major service providers such as Comcast and NTT Communications.
“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,” said Brian Byun, Vice President and General Manager, Cloud Services, VMware. “Zimbra is a great example of the type of scalable ‘cloud era’ solutions that can span smaller, on-premise 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 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 have the right to continue to utilize the Zimbra technology in its communications services, including Yahoo! Mail and Yahoo! Calendar.
“The Zimbra technology has played and will continue to play an important role in our communications services products. The technology is core to Yahoo! Mail and Yahoo! Calendar and a key differentiator for these leading products,” said Bryan Lamkin, senior vice president, Yahoo! “The customers and partners of Zimbra’s industry-leading product and successful enterprise business will be well served with VMware.”
The acquisition is expected to close in the first calendar quarter of 2010. Financial details of the transaction were not disclosed.
About VMware
VMware delivers solutions for business infrastructure virtualization that enable IT organizations to energize businesses of all sizes. With the industry leading virtualization platform – VMware vSphere™ – customers rely on VMware to reduce capital and operating expenses, improve agility, ensure business continuity, strengthen security and go green. With 2008 revenues of $1.9 billion, more than 150,000 customers and 22,000 partners, VMware is the leader in virtualization which consistently ranks as a top priority among CIOs. VMware is headquartered in Silicon Valley with offices throughout the world and can be found online at www.vmware.com.
VMware, VMware vSphere and VMware vCenter are registered trademarks and/or trademarks of VMware, Inc. in the United States and/or other jurisdictions. All other marks and names mentioned herein may be trademarks of their respective companies.
Forward-Looking Statements
Statements made in this press release which are not statements of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate, but are not limited, to, expectations for the consummation of our acquisition of Zimbra and development of its products, future demand for Zimbra and other cloud-era IT solutions, expansion of our cloud services portfolio and expectations of benefits that customers may achieve from the adoption of virtualization and management products. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) the impact of macroeconomic conditions on demand for new and innovative IT solutions, (ii) our customers' ability to transition to and implement new technologies, (iii) the uncertainty of customer acceptance of emerging technology initiatives; (iv) rapid technological and market changes in virtualization software and cloud-based IT solutions; and (v) satisfaction of closing conditions for the transaction. These forward looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including our most recent reports on Form 10-Q and Form 10-K and current reports on Form 8-K that we may file from time to time. VMware disclaims any obligation, except as required by law, to update any such forward-looking statements after the date of this release.
Why?
source: zdnet.com
Zimbra has been the sleeper cloud-based email provider for the enterprise. I’ve known about the Bechtel deal — roughly 50,000 seats globally — for some time, but couldn’t talk about it. Though it’s been a while since I’ve spoken to Ramesh May, he did share some important facts with me:
1. Zimbra’s code base is open source, with a 20,000 active members in the community. This code base, which runs on Linux, is also the foundation of Cisco WebEx Mail (formerly PostPath) user interface.
2. Yahoo! Zimbra was selling an email seat for $28/mailbox/year for 50+ seats. We’ll be interested to see how the pricing changes.
3. The company was working with the community on adding instant messaging, expanding widgets, and building an offline email client. We also saw some interesting mashup and document viewing features.
4. Back in April, the company had 130 employees, 600+ .edu customers, 44M mailboxes, and 60,000 customers.
So why hasn’t Zimbra been bigger on the national stage selling its hosted (80% of seats) and on-premises (20% of seats) email and calendaring solution? Two reasons.
First, Yahoo! did not build a direct sales force that way Google and every other enterprise email provider did.
Second, because a lot of these seats are sold through service providers. Comcast and NTT Communications have been selling Zimbra seats. You may be running Zimbra and not even know it.
So now it becomes clearer why VMWare bought this massively successful email provider.
1. The cloud email market gains a high-quality competitor. A high-quality email solution hits its stride and provides yet another alternative to LotusLive.com, Exchange Online, Google Apps, and Cisco WebEx Mail. IBM has been making hay with service providers white labeling LotusLive.com. Google’s reseller channel is almost 1 year old (see last year’s post). Cisco WebEx Mail is about to kick in. And Microsoft has dropped the cost of an online email seat in half in the past year. Let the competition begin!
2. VMWare expands its stack to include SaaS, a move to help service providers and the channel sell seats and win accounts. VMWare now as an application to go help service provides and channel partners win business. With the future of cloud computing wrapped up in the business models of service providers, VMWare has raised the bar for every other cloud technology supplier. Let the cloud channel wars begin!
3. IT shops get another reason to develop their internal clouds. Remember, Zimbra can also run on-premises. With VMWare’s virtual machine running Zimbra, IT pros can build out their virtual data centers with a real application: email. And they have only one throat to choke if something bombs: VMWare’s. How much better is that for mastering an internal cloud than having to piece together the entire stack carte blanche? Let the internal cloud build out begin!
Response
source:pcworld.com
Zimbra customers, on an emotional roller-coaster ride since it was acquired by Yahoo, welcome VMware's plans to buy the open-source e-mail, calendar and collaboration software vendor.
Many of them were vexed when Yahoo snapped up Zimbra for US$350 million in September 2007, concerned that the Zimbra suite might wilt and disappear due to Yahoo's inexperience in the enterprise software market.
Months later, when Microsoft launched its hostile attempt to buy Yahoo, the uncertainty worsened among many Zimbra customers who had migrated away from Exchange, couldn't afford it or simply didn't like it.
Although Microsoft withdrew its offer for Yahoo, the companies eventually struck a search advertising and technology deal that again brought Microsoft into the picture for Zimbra customers.
Then in September of last year, rumors started floating that Yahoo CEO Carol Bartz was actively seeking a buyer for Zimbra, which again caused uncertainty over the future of the suite.
This week, customers who felt uncomfortable about Yahoo owning Zimbra let out a sigh of relief when VMware, a major player in the virtualization software market, announced its agreement to buy Zimbra. Their investment in the Zimbra suite will be more secure with a parent company that is an enterprise software vendor and views Zimbra as a key part of its portfolio, customers said.
"With VMware buying Zimbra I feel much more confident," said Cedric Halbach, CTO at The Metropolitan Companies, which has used Zimbra successfully for companywide e-mail for about four years. "The Zimbra software is great, but it was in the wrong place in Yahoo's hands and that made its future insecure for me."
Prior to implementing Zimbra, The Metropolitan Companies used Exchange, but ditched it after finding it too expensive and unstable. Thus, Microsoft's attempt to buy Yahoo, and the search deal the vendors later struck, concerned Halbach.
"We absolutely weren't going back to Exchange. We've used it in the past and had too many problems with it, and it is very expensive once you get into the larger rollouts," he said in a phone interview.
"Even now with Microsoft as a Yahoo partner, there's still a gray haze in the background that I've been aware of and keeping my eye on, kind of on a wait-and-see [mode] while still using Zimbra, which is excellent, very powerful and reliable," Halbach said.
Zimbra has worked so well at the company for its about 200 users that Halbach and partners, including the owner of The Metropolitan Companies, recently launched a startup venture called Enterprise Technology Services to provide the Zimbra suite and other software and services on a hosted basis for small businesses.
The Zimbra suite is in use at more than 150,000 organizations, with a total of more than 55 million mailboxes. It can be installed on customer premises or accessed via the cloud from Zimbra hosting partners. VMware has said that Zimbra will further its "mission of simplifying IT." Zimbra will also beef up VMware's offerings to its vCloud hosting partners, by adding a software-as-a-service (SaaS) component to its existing IT infrastructure and application-development-platform hosted services, according to VMware.
Matthew Day, IT manager at Langs Building Supplies in Brisbane, Queensland, Australia, has renewed the company's Zimbra contract from year to year since the Yahoo acquisition out of uncertainty for the suite's future.
Now, after learning of VMware's intention of buying Zimbra, Day feels relieved. If the VMware acquisition closes successfully, Day will not hesitate to renew his company's Zimbra contract for a longer three-year period for its about 400 end-users.
"There were a number of ways the road could have gone for Zimbra and the team and I feel the VMware road is a good one to be traveling down," he said via e-mail.
Zimbra customers like Day like what they perceive as an aligned focus between it and VMware.
"VMware is well positioned to understand the needs and desires of the Zimbra product and its customer base. I feel we will see some convergence between the two business divisions bringing interoperability between Zimbra and VMware products," Day said.
L. Mark Stone, CIO at managed services provider Reliable Networks, a Zimbra customer as well as hosting partner, views the acquisition as potentially positive, but warns it could sour if VMware becomes impatient for revenue and makes decisions focused on short-term results, as it seeks to diversify beyond virtualization.
"If VMware builds on Zimbra's brand and supports their entrepreneurial culture, the acquisition will be good for Zimbra partners, customers and other stakeholders," Stone said via e-mail.
"Zimbra is a great SaaS offering, but if VMware tries to over-monetize Zimbra too quickly, that will be a problem," he added.
Stone warns that VMware must be aware that Zimbra's competition has improved greatly, including Exchange, whose 2010 version he calls a significant enhancement over Exchange 2003.
"If VMware 'gets' that Zimbra is the tail which will wag the VMware dog as VMware tries to penetrate the IaaS [infrastructure as a service] and SaaS markets, then Zimbra's best days are still ahead of it," Stone said. "If VMware conducts itself with the hubris unfortunately all too common with buyers, then this deal will fail, just like too many other acquisitions."
Bill Pray, an analyst at Burton Group, notes that VMware has been a popular choice for virtualizing e-mail servers, so being able to market its own e-mail system for on-premise deployments will make sense. Zimbra also stands to gain.
"For Zimbra, getting out from under the Yahoo umbrella and going to a parent company that can execute on an enterprise strategy with them will definitely be a bonus," Pray said.
In addition, Zimbra gives VMware another tool to sell, said Rebecca Wettemann, a Nucleus Research analyst. "VMware is selling to the same person who decides what calendars and mailboxes applications the organization uses. VMware is firmly in the IT decision-maker box," she said.
Yahoo benefitted from integrating some Zimbra technology into Yahoo Mail and Yahoo Calendar, but Zimbra never became a core service and as such wasn't a strategic fit for Yahoo, whose revenue comes mostly from advertising in its consumer online services.
"Yahoo has been trying to divest itself of noncore businesses, so selling Zimbra certainly makes sense," said Lydia Leong, a Gartner analyst.
Still, Yahoo deserves credit for not wrecking Zimbra, customers said. "Yahoo did less damage to the Zimbra brand and product than I thought they would, so I am grateful for this," Day said.
During its two-plus years under Yahoo, Zimbra's sales grew significantly, and it stayed on a healthy schedule of upgrades.
"Yahoo's management of Zimbra was outstanding. Yahoo pretty much left Zimbra alone, didn't starve it of capital, force their culture down Zimbra's throats nor milked Zimbra for every ounce of profits they could have," Stone said.
Time will tell whether Zimbra thrives as part of VMware. In the meantime, Zimbra customers are hopeful.
"This time around I am very optimistic. When I initially heard the rumors and then the official announcement, it did make me smile," Day said.
Posts
No comments:
Post a Comment