Deals

VMware acquires Zimbra: Why virtualization and email might be a good fit

VMware announced today that it’s acquiring email and collaboration service Zimbra from Yahoo.

The deal might seem like an odd match, since VMware is known for virtualization and business infrastructure, while Zimbra offers a collaboration application. Plus, Zimbra’s deals with Internet providers like Comcast and universities like Stanford mean many of its users are probably consumers and students, not corporate users.

So for starters, the acquisition suggests that VMware wants to expand into apps and collaboration. Zimbra Vice President of Sales Jim Morrisroe told me it should also help Zimbra sell itself in large, enterprise-size companies, building on the big customers it has already landed like Bechtel and H&R Block.

“On the technology side, Zimbra is already there,” Morrisroe said. “But as you know, sales and account relationships are a large proportion of working with the enterprise. VMware’s relationships will help us across the board.”

VMware is also willing to invest in improving Zimbra, Morrisroe said, so users can expect to see improved features like real-time communication, collaborative work spaces, and team scheduling. Morrisroe didn’t say anything bad about Zimbra’s current owner, but I’m guessing that as struggling Yahoo tries to focus on its identity as a media business, Zimbra might become less and less of a priority.

Meanwhile, VMware Chief Technology Officer Steve Herrod published a blog post arguing that the move benefits his company in two ways: By expanding its mission to simplify IT (in this case, email), and by expanding what’s available in VMware’s vSphere, the company’s cloud computing service where it hosts a customers’ infrastructure and applications.

The deal price was not disclosed, but All Things Digital reports it was “well below the $350 million Yahoo paid” when it acquired then-startup Zimbra in 2007.

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