Home Yahoo! Drops $350m on Zimbra; an Open Source, Enterprise RIA

Yahoo! Drops $350m on Zimbra; an Open Source, Enterprise RIA

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:

  • webmail
  • a desktop client
  • contact management
  • calendaring
  • word processing
  • spreadsheets
  • Salesforce integration
  • and a reportedly strong mobile component.

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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