It's official; Yahoo! has acquired open-source enterprise office vendor Zimbra for $350 million in cash.
The company's alternative to Microsoft's Exchange server includes:
Look out Google and Microsoft! Richard MacManus reviewed Zimbra in detail last year. Zimbra was an early force in bringing AJAX to the enterprise and adoped an RIA model in March, including both online and offline modes.
The company followed up Microsoft's very public critique of Google Apps' utility for the enterprise with a (questionable) statement of their own just last week. I wonder if there was some fascinating communication with the Yahoo! communications team about that.
Kara Swisher, left "cranky and bored" after not being briefed, broke the acquisition story based on leaks. TechCrunch broke the price of $350 million and Liz Gannes confirmed it. It looks like a 10X exit on VC investment of $30m and is being widely regarded as a bold, smart move by Yahoo! This acquisition tops the $300 million price Yahoo! paid for ad network BlueLithium earlier this month. Yahoo! is in the midst of a 100 day reorganizing campaign, what better way to do it than drop a few hundred million dollars? You have to wonder if there will be mass layoffs at the end of 100 days of news like this.
Comcast was recently announced as a Zimbra customer, others in our neck of the woods include Digg and Mozilla. Zimbra made an announcement last October claiming that they had 4 million paying customers, though that number was widely questioned. Zimbra performance has also gotten mixed reviews - some people love it.
Yahoo! already offers a variety of enterprise services, including enterprise IM and search, but has deemphasized enterprise offerings for the past several years in favor of online media and to some degree, advertising. It will be very interesting to see what the company does with Zimbra. I say better late than never when it comes to hip new software. If staff from the excellent Yahoo! Mail team gets moved over to work on Zimbra, things could really heat up.
All eyes will now fall on Zoho, of course.
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this is one of those "had to" moves for Yahoo. Not in a way that's stupid though. Zimbra is a solid suite of apps and it gives them instant building blocks to compete with Google and Microsoft.
Posted by: drew olanoff | September 17, 2007 1:39 PMMarshall,
Interesting news. Hope Yahoo does a good job integrating this into this portfolio (they've had mixed results in the past in my opinion). I think Yahoo's better off getting into tools/products rather than content management.
Posted by: Parag Mathur | September 17, 2007 1:42 PMHead over to Yahoo!'s corporate blog (Yodel Anecdotal) for Brad Garlinghouse's take on it.
Posted by: Nicki Dugan | September 17, 2007 1:44 PMWow that's big, so Yahoo is entering web office business too - with a pure open source approach? I agree with Zimbra's concerns about Google Apps (Sarbanes-Oxley compliance issues), so this one may be a viable alternative indeed with Yahoo's backing.
Posted by: Emre Sokullu | September 17, 2007 2:22 PMHow about 1/2 a billion dollars. I'm sure Yahoo knows what it's doing, however taking all that code and integrating it with their current offerings while also figuring out how to monetize it is going to require great execution. Let's hope they keep some good people around for that.
Posted by: Peter Cranstone | September 17, 2007 2:26 PMLooks like the office application market will be heating up again. It's about time people start taking on Microsoft's strangle hold.
Posted by: Justin Kistner | September 17, 2007 2:46 PMOne detail though: Zimbra is not really Open Source.
This guy explains it quite well:
Posted by: MeTheGeek | September 17, 2007 2:47 PMhttp://www.rants.org/2007/06/26/when-is-open-source-not-open-source/
OpenGoo is open source.
http://www.opengoo.org/
And it is in its second pre-alpha!
Posted by: MeTheGeek | September 17, 2007 2:50 PMThanks for those links, MeTheGeek - much appreciated. I'll make sure to reference them next time the company is bought for a half billion dollars :(
Seriously, thanks though.
Posted by: Marshall Kirkpatrick | September 17, 2007 2:56 PMHa! Marshall, I was commenting on the OpenSource issue, not the 350 Mill. See, I live in a country that exports 120 Mill software A YEAR, as a country! So that makes me analyze the comments on your post from another perspective.
On the other hand, we are able to MAKE a Zimbra for much less than that, and make it really open source.
I am glad you are taking note. I know either you or Richard will mention at least one of those links again, seriously. No, really, seriously seriously. Not only because of all the love I profuse for you guys (check my blog if you need proof), but because of its merits.
And I still love you (seriously - as in no irony)
Posted by: MeTheGeek | September 17, 2007 3:16 PMYahoo! didn't only get some software out of the deal, they also picked up an instant channel to distribute software into the enterprise: http://blog.01.com/?p=325
Posted by: Marshall Weinstein | September 17, 2007 4:37 PMThanks Marshall for your comment, that's a real strong point and the blog post you link to here is quite interesting. I should have considered that when writing this post. You're obviously more of a Zimbra expert than I am (as a reseller) and with a name like that I'd give you the benefit of the doubt on any topic! :)
Posted by: Marshall Kirkpatrick | September 17, 2007 4:45 PMI just find this deal incredibly pricey...350M for email client and a couple of other simplistic web apps without a whole lot traction...Amazing...
Posted by: mj | September 18, 2007 12:07 AM