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Yahoo counters foes, nabs open source collaboration vendor Zimbra

By , Network World
September 17, 2007 07:43 PM ET

Network World - 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.

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