VMware Sells Zimbra Collaboration Group to Telligent
When Pat Gelsinger (pictured) took over for Paul Maritz in August 2012 as VMware's CEO, it became readily apparent that the only change the company wasn't going to make was in the chair where the buck stops.
Thanks to its decade-long period of rapid growth, the EMC-owned cash cow had become dangerously close to becoming a herd of cats, having acquired several companies with the idea that they would help expand the company's horizons beyond the hypervisor. Most of them—such as Nicira, SpringSource and DynamicOps—have fit in well, but some haven't aligned closely enough to the company's overall three-headed mission: hybrid cloud, software-defined data center and mobile computing.
Examples of these now-orphaned groups are SlideRocket (a Web-based presentation application that was sold to ClearSlide in March 2013) and Zimbra (enterprise collaboration software).
Gelsinger had to play the heavy and make some cutbacks in projects and head count—the latter of which is often cited as the hardest job for managers to carry out. In February 2013, Gelsinger announced that VMware would need to cut 900 jobs—or about 7 percent of its workforce—worldwide.
It's always better to sell off an asset than to simply trim it out of the budget, so VMware had some good news to report in its cutback efforts July 15. The Palo Alto, Calif.-based virtualization software developer revealed that Dallas-based enterprise collaboration software maker Telligent has bought the assets of Zimbra, which VMware acquired from Yahoo for about $100 million in February 2010. Terms of the deal were not released.
Zimbra's assets include all of its product intellectual property, existing customer and partner relationships, and the core development team. After the deal closes, Telligent and Zimbra will merge into a single company under the Zimbra brand to offer a unified social collaboration suite.
"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," VMware Vice President of End-User Computing Product Marketing Erik Frieberg wrote in the company blog.
"VMware will continue working with Telligent as a strategic partner, which includes maintaining a minority equity investment in Telligent along with a number of other investors. We are confident that customers will be in good hands," Frieberg wrote.
In the three years it was owned by VMware, "Zimbra has experienced significant growth in its email and collaboration business, adding more than 2,600 net-new customers and growing its footprint to more than 85 million mailboxes," Frieberg wrote.