VMware Sells Off Zimbra In Latest Chapter Of Its Corporate Makeover


VMware has sold its Zimbra suite of open source SaaS productivity apps to Telligent, a Dallas-based enterprise social software vendor. Terms of the deal weren't disclosed.

Telligent is getting Zimbra's core team of employees, as well as its product IP and customer and partner relationships. After the deal closes, Telligent will rebrand itself as Zimbra.

VMware is focusing on software-defined data center, hybrid cloud and end-user computing, and Zimbra is its latest move to sell off a unit that doesn't fit with its strategy.

[Related: After Re-Org, Will Microsoft Expand Hardware Lineup Beyond Xbox, Surface?]

However, VMware is painting the Zimbra sale as something other than a move to shed assets.

"It was important to VMware to find a buyer that would be a good home for Zimbra’s people, customers and partners, and we believe Telligent is a great fit," said Erik Frieberg, vice president of product marketing for VMware's End User Computing unit, in a Monday blog post.

Frieberg said Zimbra has "experienced significant growth" since acquiring Zimbra in 2010 and has added more than 2,600 new customers, with a total user base of 85 million mailboxes.

VMware reportedly paid around $100 million for Zimbra, and it was big deal for VMware at the time for a few reasons.

First, Zimbra gave VMware an integrated suite of SaaS productivity apps to compete with Microsoft Office. Zimbra was also part of former VMware CEO Paul Maritz's bid to diversify beyond server virtualization technology and take on competitors in other parts of the cloud stack.

Microsoft at the time was still getting partners familiar with the cloud billing model for Office 365, and VMware was probably hoping to use Zimbra to lure away some of them.

Maritz wanted to assemble a collection of apps free from any ties to Windows, to get ready for a world where the PC would no longer be the primary form of computing. Besides Zimbra, VMware bought SlideRocket, a startup that did SaaS presentations, in 2011, and sold it to cloud startup ClearSlide in March.

The same year, VMware acquired Socialcast, an enterprise collaboration startup, and this could be next to go.

VMware, under CEO Pat Gelsinger, has undergone a number of major changes in the past 10 months, including the departure of several top executives and the movement of 600 employees to Pivotal, VMware's joint venture with EMC that's focused on big data and cloud apps.

Getting rid of Zimbra will help VMware concentrate on cloud, but one partner told CRN it's no sure bet whether VMware will be able to execute on this transformation.

"VMware has the vision for the future, but I think people are deeply questioning if they can actually deliver on it," said the source, who spoke on condition of anonymity.

PUBLISHED JULY 15, 2013