Zimbra: Yahoo Wasn't a Fit

Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More .

After spending $350 million and two years of effort, Yahoo officially announced yesterday that it was selling its
open source Zimbra e-mail collaboration unit to VMware.

So why the change of heart?

In conversation with InternetNews.com, top executives from Zimbra
commented on their time at Yahoo and why a parting became necessary. While
having an e-mail collaboration vendor made sense for Yahoo two years ago,
today’s Yahoo just isn’t the same company — and it doesn’t have the same
goals.

“Clearly, as the macroeconomy changed and as the Yahoo situation changed
from the Microsoft stuff all the way to CEO changes, they looked at their
focus and they want to be a consumer starting point,” Zimbra General Manager
Jim Morrisroe told InternetNews.com, referring both to Yahoo’s deal
to outsource its search engine to Microsoft (NASDAQ: MSFT) and its
changes at the top that in early 2009 saw former Autodesk exec Carol Bartz
appointed to the CEO post, replacing Yahoo founder Jerry Yang.

“Our enterprise software market and momentum with big cloud providers
wasn’t necessarily a fit as much as it was,” Morrisroe said. “They did
everything we needed to help us grow our business and help us satisfy
customers, but it just wasn’t a fit.”

In the time since Zimbra
Collaboration Suite (ZCS) 6 release came out only in September 2009,
representing the first major update to Zimbra’s flagship platform in 18
months. Prior releases of Zimbra had been emerging on a faster timeframe,
often every six months.

“I think clearly our goal is to continue innovation at a quicker pace
than every 18 months,” Morrisroe said. “We will continue to invest a ton in
R&D and I think we will increase that as part of VMware.”

As part of the VMware (NYSE: VMW) acquisition, Morrisroe noted that
nearly 100 percent of the Zimbra team will be moving from Yahoo to VMware.
There are, however, two notable exceptions: Zimbra founders Scott
Dietzen and Satish Dharmaraj won’t be among the core team joining the
new company. Both had joined Yahoo after the 2007 acquisition, but each left
the company over the course of the past year.

Further changes may yet be in store as well. As part of Zimbra’s 2007
Yahoo acquisition, much of Zimbra’s source code had been relicensed to the
Yahoo Public License from a Mozilla plus Attribution open source license.
With the pending move to VMware, it’s not clear yet whether Zimbra will be
relicensed again under a different open source license.

“In the short term, the goal is to bring the business over and not to
make any changes around the business,” John Robb, vice president of
marketing and product management, told InternetNews.com. “Going
forward, everything is up for consideration, and that’s an area where we
definitely want to look at what the right thing is to do going forward. Stay
tuned — that’s definitely an area of interest for us.”

Despite some areas of uncertainty, the move to VMware is seen as a very
positive one by Zimbra execs that will help to fill a need in their overall
strategy.

“Our 2010 plan was all about global distribution, including sales,
marketing and professional services,” Morrisroe said. “In that way, this
acquisition will be amazing for the product: The footprint of VMware is
gigantic compared to what we’ve had, and enabling that channel to sell the
product will pay huge dividends for us.”

“We have all the technology components to compete with whomever — be it
Google or Microsoft Exchange — so now it’s about coverage on both the sales
and services side.”

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of
the internet.com network.