VMware Acquires Zimbra from Yahoo

VMware is clearly moving up the stack with the recent acquisition of the Zimbra email suite from Yahoo, which was just announced after being rumored for a while. The company said it reached an agreement with Yahoo and will incorporate Zimbra's services in its own, diversifying offerings. Yahoo has been looking to shed the white-label email provider for the past few months after acquiring it in 2007 as part of its cost-cutting efforts.

"VMware... announced that it has entered into a definitive agreement to acquire Zimbra, a leading vendor of email and collaboration software, from Yahoo! Inc. This acquisition will further VMware’s mission of taking complexity out of the datacenter, desktop, application development and core IT services, and delivering a fundamentally more efficient and new approach to IT," the official press release reads.

The company says it will continue to offer and develop Zimbra's existing products while also working to integrate them with VMware's existing technologies and its vSphere-based cloud infrastructure. The company can now offer a complete set of services from underlying virtualization technology, traditionally its core product, to the cloud infrastructure running on top of it, which it gained with the acquisition of the open-source Java framework provider SpringSource, and now to the apps at the top of the stack. The move is regarded as being strategic as the company continues to grow into a serious contender in the cloud-based services for enterprise market.

"We want to thank Yahoo! for helping Zimbra usher in a period of phenomenal growth over the past 2 years. And we are proud to have contributed to the current and future success of Yahoo! during this time as well. Zimbra’s technologies have and will continue to play a role in Yahoo!’s communications services, including Yahoo! Mail and Yahoo! Calendar," Jim Morrisroe, VP of Sales at Zimbra, wrote. Under the deal VMware acquires "all Zimbra technology and intellectual property." It is also said that it would offer Zimbra employees strong incentives to stay with the company after the acquisition. The financial details of the deal haven't been disclosed, but the sale price is likely to be well below the $350 million Yahoo paid for the company a little over two years ago.