Yahoo counters foes, nabs open source collaboration vendor Zimbra

Yahoo Monday acquired open source collaboration vendor Zimbra for $350 million keeping pace with Google, IBM and Microsoft to supply corporate users with collaboration tools that can run online or off.

Privately held Zimbra develops open source and commercials versions of its flagship product, Collaboration Suite, which includes a back-end server and a browser-based Ajax client that offers e-mail, contacts, calendar, VoIP and a text editor. It also develops software called Zimlets, which are small applications that provide integration of e-mail with third-party data sources.

“I guess a core message and my expectation is that Yahoo is going to use this to get into the enterprise mail market,” said Matt Cain, an analyst for Gartner. “Zimbra is the hot open source e-mail vendor out there.”

The other top open source messaging vendor, Scalix, was bought by Linux OS vendor Xandros in July.

The acquisition overlaps a major overhaul of Yahoo’s own online consumer-based Yahoo Mail service. Just last month, Yahoo completed the roll out of its own Ajax client for Yahoo Mail. The company has also promised to open source the underlying code to Yahoo Mail to support application and e-mail integration.

Yahoo said it plans to use Zimbra to gain a toehold in the university, business and ISP markets. Those markets are also being targeted by competitor Google, which acquired Writely in March 2006 and used it as the foundation for its current Google Docs & Spreadsheet service and its Google Apps Premier Edition targeted at corporate users.

The big difference is that Zimbra gives users a server option for on-premise use, as well as, a hosted offering that lets companies use their own domain name.

With that model, Zimbra seems to more closely mirror Microsoft, which plans to offer hosted and on-premise versions of its software, including Exchange.

“The question I would ask is does Yahoo want to be in the business of selling on-premise software,” said Gartner’s Cain.

In addition to Google and Microsoft, IBM is also aggressively adapting its collaboration tools for delivery via a hosted model.

In February, Gartner predicted by the end of this year that “Microsoft, Yahoo, AOL and IBM (among others) will likely introduce SaaS [software as a service] offerings that compete with Google Apps. By the end of 2010, 30% of enterprises in North America will likely sanction the use of Google Apps (or the equivalent from a competitor) for at least some of their users.”

Yahoo will continue to offer the Zimbra code to the open source community, as well as, continue to develop the network version that includes proprietary features, Satish Dharmaraj, CEO of Zimbra said on his blog. Zimbra still plans to launch version 5.0 of Collaboration Suite later this year, according to Dharmaraj.

Zimbra’s software supports Linux and Mac OS X on the server-side; Windows, Linux and Mac on the desktop; and Firefox, Safari and Internet Explorer browsers.

“We are committed to building on Zimbra’s success and to investing in both Zimbra’s on-premise and SaaS product offerings,” said Brad Garlinghouse, senior vice president, communications and communities at Yahoo.

Zimbra also includes an Ajax-based administrative interface with scripting tools. The server supports MAPI, iSync, IMAP, POP, iCal and CalDAV protocols, and supports other clients including Microsoft Outlook, Apple desktop suite and Mozilla Thunderbird.

Zimbra also offers Zimbra Mobile, which includes over-the-air "push" synchronization to mobile devices without the need for third party software or additional servers for most devices. Zimbra offers built-in antispam and antivirus scanning. As an option, users can add archiving and discovery to meet compliance needs around e-mail.

In July, Google spent $625 million to acquire Postini and its e-mail security services including antispam, antivirus and compliance.

The Zimbra team, which includes about 100 employees, will join Garlinghouse’s communications group, and Yahoo plans to implement the Zimbra platform for its own employees.

Following the acquisition, Zimbra will become a wholly-owned subsidiary of Yahoo. An FAQ on the Zimbra Web site hinted that Yahoo is likely to drop the Zimbra brand name, although final plans have not been completed.

Zimbra is based in San Mateo, Calif., and is backed by venture capital firms Benchmark Partners, Redpoint Ventures and Accel Capital.

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