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VMware-Zimbra acquisition rumor perplexes users

VMware's rumored acquisition of Zimbra, an open source email and collaboration company owned by Yahoo, doesn't make much sense to observers.

A report that VMware has bid for Yahoo's Zimbra, an open source email and collaboration company, has shocked VMware...

users and observers.

Zimbra, which sold to Yahoo Inc. in 2007 for $350 million, boasts 50 million paid seats for its email and collaboration product, both hosted and on-premise. VMware Inc. has not confirmed the deal; the Monday report by the Wall Street Journal's "All Things Digital" said it was unclear how much VMware would pay for the company.

VMware buying Zimbra would be a mistake.
Steve Foskett, independent consultant,
Widespread confusion greeted word of the rumored VMware-Zimbra acquisition. Gregg Rosenberg, the CEO of Ricis, Inc., an email specialist based in Tinley Park, Ill., said he was mystified as to why VMware would want Zimbra.

"I could see Microsoft buying Zimbra, because it needs something better than [Outlook Web Access], which is terrible," he said. "But VMware?"

Perplexed Twitter chatter
Many users wonder why – rather than acquiring a seemingly tangential email company – VMware hasn't chosen to focus on its current technology portfolio. Members of the VMware community on Twitter, for example, questioned why the company isn't focusing more on its existing server and desktop virtualization products.

"How about aiming to make [VMware] View better?" kibitzed @Shanetech, the account for ShaneTech Consulting Inc., a New York City virtualization consulting firm.

Others on Twitter saw the potential VMware-Zimbra acquisition as reckless.

"VMware buying Zimbra would be a mistake; competing with Microsoft, Google, Apple for email servers?" said Steve Foskett, an independent storage consultant.

But some observers said the move makes a lot of sense, noting some natural synergies between VMware and Zimbra. Richard McAniff, VMware's newly installed chief development officer and executive vice president, was a longtime Microsoft executive responsible for Microsoft Office. And VMware CEO Paul Maritz, also a Microsoft veteran, showed his propensity for moving up the software stack with the acquisition of SpringSource last summer.

Beyond these synergies, acquiring Zimbra -- or a company like it -- is a crucial move for VMware's continued survival, argued Chris Wolf, an analyst at Burton Group. On the Twitter site, he wrote that VMware's business can't always be about running Microsoft applications in virtual machines, and that if VMware can break organizations' dependency on Exchange, they may loosen their dependency on Microsoft.

If the VMware-Zimbra acquisition goes through, VMware has plenty of legroom to take on the burden of hosting a large-scale email service, thanks to its enormous data center in Wenatchee, Wash. that was completed this fall.

Senior News Director Barbara Darrow contributed to this report.

Let us know what you think about the story; email Alex Barrett, News Director at, or follow @aebarrett on twitter.

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