VMW is acquiring Zimba from Yahoo:
VMware's New Weapon: E-mail
Taylor Buley, 01.12.10, 2:50 PM ET
Forbes
BURLINGAME, Calif. - VMWare is expected to announce Tuesday that it is acquiring Zimbra from Yahoo!, according to The Wall Street Journal's Kara Swisher.
Sources close to the transaction tell Forbes to expect the announcement at the end of the trading day. A spokesperson for VMware declined to confirm the deal, saying the company does not address rumors or speculation.
Zimbra is a white label, open-source e-mail service popular on Linux and Apple Macintosh e-mail servers. The selling price is expected to be around half the $350 million Yahoo! paid for the company in 2007.
If the rumors are true, Zimbra's technology would give the Palo Alto-based VMware a messaging platform for service providers, according to Enterprise Strategy Group analyst Mark Bowker. It would allow service providers to host e-mail for small businesses like doctor and dentist offices, he notes.
"I think this is something else they can arm its service provider community with," Bowker told Forbes. "Not only can they help them sell computing capacity, they can arm them with an e-mail offering."
Bowker writes that the service providers likely to offer Zimbra's white-label e-mail to customers will be smaller local technology integrators, rather than larger cloud providers like Terremark. Large businesses, he notes, typically use Microsoft's Exchange platform for e-mail.
Zimbra would be a good, long-term investment for VMware, Bowker says. But in the short term, he says, VMware should focus on selling software that helps bigger enterprises transition software from companies like SAP and Oracle to the VMware platform.
Tech Tidbits quotes the best of the day's news in a byte-sized format. E-mail the writer at tbuley@forbes.com or follow him on Twitter.
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