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Summary:

On the heels of its acquisition of SpringSource, virtualization giant VMware has announced that it will acquire email and collaboration software player Zimbra from Yahoo. With Zimbra, VMware is spreading out to applications, and moving steadily up the software stack.

VMware, on the heels of its acquisition of SpringSource, has announced that it will acquire email and collaboration software player Zimbra from Yahoo. With Zimbra, the virtualization giant VMware is spreading out to applications, and moving steadily up the software stack.

Zimbra’s open-source collaboration tools are increasingly popular, and the company claims to serve more than 55 million mailboxes.  (Yahoo acquired the company for $350 million in 2007, but terms of VMware’s acquisition were not disclosed.) Meanwhile, VMware has been struggling to contend with free and open-source competitors to its virtualization offerings, including free options bundled in many operating systems. It has become essential for the company to diversify its software products away from just costly proprietary virtualization offerings. Relatively new CEO Paul Maritz, a long-time Microsoft executive, has been pursuing acquisitions in order to achieve that goal, especially focusing on the cloud. Brian Byun, VP and GM of cloud services at VMware, said in a statement that:

“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. 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. “

Meanwhile, in an advisory, SugarCRM CEO Larry Augustin said, “VMWare is clearly moving aggressively up the stack and is not content to be limited to virtualization or even infrastructure (SpringSource).  With the Zimbra acquisition VMWare is squarely positioning itself in the applications and collaboration space.”

To take that analysis further, cloud-based and service-oriented platforms are, in the end, only as good as the applications that companies can offer on them. Many companies and users will not subscribe to cloud-based services, or favor virtualized platforms that don’t present them with a healthy amount of usable software.

The same story has already been played out in the arena of operating systems and applications, many times over. Operating systems that win are ones that have many applications available for them. Maritz would be acutely aware of the parallels between standard operating systems, virtualization platforms and applications, given the many years he spent at Microsoft.

With its SpringSource acquisition VMware gained clout with developers, and the Zimbra acquisition looks to be a very direct move into cloud-based applications and collaboration options. Judging from these acquisitions, Paul Maritz has in mind a very different company from the virtualization-focused one that VMware has been in the past

Related GigaOM Pro Research:

What VMware’s SpringSource Acquisition Means for Microsoft

Social Media in the Enterprise

Email: The Reports of My Death are Greatly Exaggerated

  1. Zimbra going out of Yahoo hand! mybloglog to shut down.
    Yahoo missed social media and real innovation. Mybloglog could have been friendfeed. but no single development since its acquisition. and they will shut it down.
    why did yahoo buy zimbra at the 1st place to sell it again?

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  2. [...] VMWare today announced it had bought Zimbra, providers of online email and collaboration apps (In Acquiring Zimbra, VMware Moves Squarely Toward Apps and Collaboration). WTF is going [...]

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  3. [...] In Acquiring Zimbra, VMware Moves Squarely Toward Apps and Collaboration (tags: collaboration) [...]

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  4. [...] In Acquiring Zimbra, VMware Moves Squarely Toward Apps and Collaboration [...]

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  5. [...] to gain a foothold with application developers and the open source community, and more recently, buying Zimbra, which offers cloud-based mail and collaboration applications.  The acquisitions have been widely [...]

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  6. [...] business adoption. VMware / Zimbra VMware boldly entered the cloud collaboration race when it acquired Zimbra in January. Largely hidden within Yahoo! from its initial acquisition, Zimbra will now get the support needed [...]

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  7. [...] has been buying startups such as Zimbra, SpringSource and others as it works to transition from providing a hypervisor to offering [...]

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  8. [...] Zimbra, Jan. 2010, price undisclosed: When VMware purchased Zimbra’s hosted email from Yahoo it was an acknowledgment that providing a platform might not be enough because platforms rarely sell themselves to VMware’s enterprise customer base, apps do. For customers needing a more visible value-add in order to hop onto the VMware platform, Zimbra was the icing on the PaaS. [...]

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