VMware buying Yahoo's Zimbra open source messaging business

Yahoo sells off its Zimbra open source messaging business

Yahoo Tuesday plans to sell off its Zimbra open source messaging business to VMware, a move that will help the virtualization leader expand its technology portfolio.

VMware Tuesday said it was buying Yahoo's Zimbra open source messaging business as a way to bolster its evolving collaboration platform.

Terms of the deal were not announced, but various news outlets have reported the selling price to be close to $100 million. Yahoo bought Zimbra in 2007 for $350 million.

Company officials said that VMware has acquired all the intellectual property associated with Zimbra, an open source messaging platform popular on the Linux and Mac OS platforms and with universities and service providers.

Yahoo retains the right to use the parts of the product it has built into its mail and calendar offerings.

Zimbra counts more than 55 million mailboxes, with a 2009 growth overall of 86%.

Chris Wolf, an analyst with the Burton Group, says the deal makes sense for VMware, which realizes it needs to expand from its focus on virtualization as competitors such as Microsoft threaten to eat heavily into that market. "The Zimbra acquisition is a very smart move on VMware's part," Wolf says. "It is part of an effort to redefine the traditional application stack and what enterprises expect out of it."

"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," says Brian Byun, vice president and general manager for cloud services at VMware.

In April 2009, VMware, now run by ex-Microsoft executive Paul Maritz, bought Java vendor SpringSource, which makes Web application development and management tools with a heavy emphasis on open source. It was the first indication of VMware effort add to its virtualization expertise.

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