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VMWare Makes Cloud Computing Intentions Clear with Zimbra Buy
Virtualisation and Cloud Computing is gaining more buzz in 2010 with all large tech companies trying to gain market share. EMC owned Virtualisation provider VMware has declared its intent to seek profits from the cloud by annoucing its acquisition of e-mail and collaboration vendor Zimbra from Yahoo. Zimbra’s software provides a full enterprise feature set and the structure accommodates for easier cloud and virtualisation adoption. This explains VMware’s interest in the company as they plan to integrate Zimbra as an integral part of their service portfolio rather than an independent unit. VMware has been articulate in saying they will optimize Zimbra’s products for better compatibility with the vSphere-based cloud-infrastructure while simultaneously providing support to existing Zimbra users.
 
"Zimbra is a great example of the type of scalable 'cloud era' solutions that can span smaller, on-premise implementations to the cloud. It will be a building block in an expanding portfolio of solutions that can be offered as a virtual appliance or by a cloud service provider," said Brian Byun, VMware's vice president and general manager, cloud services.
 
Yahoo bought Zimbra in 2007 for USD $350 million with the intention of extending its services and footprint into the enterprise software market. However, due to inexperience in the Web mail sector and Google’s overall dominance in this market has now led Yahoo to divest in non-core businesses. In fact, Carol Bartz who took over as CEO at Yahoo in 2009, has been actively seeking a buyer for Zimbra, as part of her strategy to cut costs and shore up flagging revenues of the company. Users of Zimbra have applauded VMware's decision to buy the open source email and collaboration vendor who currently has more than 55 million mailboxes.
 
The acquisition is a clear indication that VMware plans to transform from being a virtualisation enabler into a complete cloud stack provider. This implies direct competition with other cloud computing providers like Amazon, Microsoft, HP, IBM and Rackspace.
 
The buy has helped VMware up the ante against Microsoft who recently inked a USD $250 million cloud computing agreement with HP. For the naysayers, who contended that VMware's move to integrate e-mail with the cloud not be able to match Microsoft’s Exchange 2010, there's news out just now that Panasonic is migrating to the cloud, ditching Microsoft Exchange and moving to IBM’s LotusOne cloud computing technology.
 
Further, VMware, along with parent company EMC and Cisco, has also entered a Virtual Computing Environment (VCE) coalition in order to provide customers with an integrated hardware and software bundle. The acquisition of Zimbra gives VMware the legroom it needs to turn that bundle into something very interesting for its customers. Ex–Microsoft veteran Paul Maritz and current CEO of VMware definitely seems to be making the right moves as of now.

Why is VMware Increasingly Interested in Open Source?

VMware’s previous acquisitions of two open source companies – Hyperic and Java vendor SpringSource – means they could also be delving into the system software and application environment domain and sharpen its knives to fight competition from IBM, Oracle and Novell. VMware intends to promote its platform-as-a-service delivery model by way of products gained by way of acquiring the two companies. And in order to attract developers towards their platform they need to incubate a huge ISV ecosystem and they seem to be on their way to doing just that.
 
This also explains VMware’s interest in picking up open source companies exclusively. It projects an image of VMware being an ideal open source technology partner, which is essential for their plans to build their cloud stack through an open source ecosystem development program. After all, a cloud will only be as good as the applications that can truly take advantage of it.
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