VMware Sells Zimbra, Microsoft Exchange Rival, to Telligent
VMware (VMW) has sold Zimbra, its Microsoft (MSFT) Exchange alternative, to Telligent. The VAR Guy isn’t shocked, considering VMware has been selling off non-core assets and Zimbra’s website had barely been updated this year. But what exactly does Zimbra’s sale mean to VMware and its channel partners? Here’s the analysis.
First, a history lesson. VMware acquired Zimbra, an open source email platform, from Yahoo in January 2010. VMware’s original goal was to promote Zimbra on-premises and through cloud services providers — especially heads-up vs. Microsoft Exchange. In some ways the strategy worked. By January 2013, Zimbra was considered a surprise alternative to Microsoft Office 365 and Google Apps in government markets.
Recent Silence
But the wins didn’t come often enough. By February 2013, The VAR Guy openly speculated about whether VMware would keep or sell Zimbra. By May 2013, The VAR Guy wondered if Zimbra would surface in VMware’s vCloud Hybrid Service. But nothing ever came of it. Clearly, VMware was shopping Zimbra.
And now Telligent — which focuses on enterprise social software — has acquired Zimbra. And going forward, Telligent will be known as Zimbra. Telligent CEO Patrick Brandt will lead the combined company. It sounds like Intel Capital, NXT Capital Venture Finance, BDCA, Hall Financial Group and VMware will each invest in the new Zimbra — which offers a “unified social collaboration suite built for the post-PC era.”
In a prepared statement, Brandt said: “Zimbra enables traditional collaboration through features such as email, calendar sharing and address books, while Telligent supports real-time collaboration via chat, social networking, online communities and more. The combination of the two will enable companies to easily share documents and ideas instantly, providing true unified collaboration.”
Big Questions
The VAR Guy’s key questions going forward:
1. Partners and Customers: Zimbra says the combined company will have a global base of more than 5,000 customers and 400 partners. But The VAR Guy has been hearing that 400 partner figure for several years. Has there been any partner growth?
2. Cloud Computing: Generally speaking, Zimbra has not hosted its own software and instead deferred to telcos, Internet service providers and cloud services providers to host the software. Will that approach continue?
3. Rivalries: Does Zimbra still see an opportunity to disrupt Exchange (on premises) and Office 365 and Google Apps (in the cloud)? If so, what are the opportunities for partners?
4. Marketing: How will Zimbra build a stronger brand while battling cloud and enterprise software giants?
5. Open Source: Zimbra is an open source platform. What steps will Zimbra take to engage and excite that open source community?
That’s all for now. The VAR Guy will check in with his Zimbra sources for more insights.
Zimbra was an albatross
Zimbra was an albatross around Yahoo’s neck, and it was an albatross around VMware’s neck. At the end of the day, Zimbra delivers nothing of value that cannot be delivered by a pure open source solution such as Citadel or Kolab. If people truly want to overpay for a messaging and collaboration system, they’re generally going to go with Exchange.
Kudos to VMware for unloading the albatross.
Albatross? I respectfully
Albatross? I respectfully disagree. I think Yahoo and then VMware simply underestimated the power of Microsoft Exchange’s installed base, and the marketing dollars/disruptive power needed to replace it. Google seems to be the only company giving Exchange a run for its money in business email these days…
-jp
First a startup, then owned
First a startup, then owned by Yahoo, then owned by VMware, now being sold off again, likely at a fire sale price. I saw a commenter on another site refer to Zimbra as an albatross hanging on the neck of whoever owns it, and that’s a pretty good description.
Zimbra helped themselves to the open source underpinnings that make their product actually work, but if you want it to do anything useful you have to buy the expensive proprietary version. Much has been written about the “open core” model and how it neatly combines the worst of both open source and proprietary software. So it’s no surprise that Zimbra is struggling.
Let’s face it, anyone who wants to spend too much money on email and collaboration is still buying Exchange. Smart deployers of open source are going with pure open source solutions such as Citadel and Kolab. And everyone else is simply dropping anchor in the cloud. There’s no room for worst-of-all-worlds solutions such as Zimbra.
IGnatius: While I don’t agree
IGnatius: While I don’t agree with your description of Zimbra, I do agree that everyone is now dropping anchor in the cloud — and VMware never did quite help Zimbra to master that reality.
-jp
Zimbra is a great fit for the
Zimbra is a great fit for the market and will only continue to grow.
VMware added to the professional services layer and now the Telligent team will bring more focus and advancement to the new Zimbra product. This is great news for the market and for the well established Zimbra customer base.
We have been hosting customers on Zimbra since 2007, before anyone called hosting ‘the cloud’, and here is why it works:
* Scaleable
Support anywhere from 1 to 100,000 accounts easily
* Supported
Based on open standards the application is easy to support and integrate with other applications. All the major cloud providers are creating walled gardens around their platform which hinders growth and the customer’s ability to easily transition between service providers.
* Affordable
Frequently less than half the price for a fully supported Zimbra hosted solution than for Exchange/365. Money talks.
Tue open source solutions can be great but the truth is that 95% of companies do not have the staff or resources to deploy and support services such as Kolab or Citadel. Total operational costs tend to shy businesses away from rolling their own.
There are great days ahead with Zimbra!
John: I agree that there are
John: I agree that there are successful Zimbra hosting providers. I just wish Yahoo and then VMware spent more time promoting those hosting providers to end customers.
-jp
I worked at VMware when
I worked at VMware when Zimbra was in the process of being aquired. Honestly without going into details I have to agree with Joe’s position. The problem was VMware was looking to compete with Microsoft but underestimated the market power MS wielded at the time. This actually might be a better situation now with for zimbra. Being a company now with its own direction again might actually be a better fit. Under VMware very little happened with Zimbra. Yahoo largely used it for its own email service to great effect (but poor commercial sales effect) again going back to they didn’t use it well when they had it.
Hi Anonymous: Thanks for the
Hi Anonymous: Thanks for the comment. Going forward, I think Zimbra has to somehow change the rules of the game. “Competing” against Exchange at this stage of the game seems futile. Curious to see if Zimbra can somehow move into a blue ocean opportunity that we’re all overlooking… -jp