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Blogs > MWD Advisors

Telligent acquires Zimbra, becomes "Zimbra"
Angela Ashenden By: Angela Ashenden, Principal Analyst, MWD Advisors
Published: 16th July 2013
This work is licensed under a Creative Commons License
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Monday’s breaking news was that social collaboration and online communities vendor Telligent is acquiring the assets of Zimbra from its existing owners VMware for an undisclosed sum. The new combined company will take on the Zimbra name, and will be headed up by Telligent’s existing CEO, Patrick Brandt. The acquisition includes Zimbra’s email and collaboration software IP, its existing customer and partner relationships and the core Zimbra team.

I think it’s fair to say that no one will be particularly surprised to see VMware divesting Zimbra. It was a rather odd direction for the company to take in the first place and, while VMware has stuck it out longer than its predecessor Yahoo! (which acquired Zimbra for $350m in 2007 only to sell to VMware two years later for an undisclosed sum), and Zimbra has continued to develop its technology and build its customer base during that time, it has never seemed to fit into the VMware strategy particularly well. So in that respect, it makes more sense for Zimbra to pair up with another enterprise collaboration software player, who will at least be having the same types of conversations with prospects, and offers greater opportunity for cross-selling and up-selling.

However, though the Telligent brand will apparently be departing, it is Telligent who is the driving party in this deal, and so the question is, what is in this for Telligent? Branding and market presence is clearly one argument here: the fact that the Telligent brand is being ditched in favour of the Zimbra brand highlights that, despite its best efforts, Telligent has struggled to gain the same degree of market awareness and profile that its competitor Jive has, even though Telligent has been in the online communities business for longer. The acquisition will also help Telligent to broaden out its enterprise collaboration story; though doing this well will require a lot of investment to bring the two technologies together in terms of user experience, as well as to cleanly integrate the two environments, a portfolio that combines social communities with email and document sharing should be an interesting proposition—and one that puts Telligent/Zimbra squarely in competition with IBM (with its Notes/Connections story targeting the large enterprise market) and Microsoft (with Office 365 making significant inroads at the SMB end of the market). It will certainly be interesting to see how effectively the new combined company competes here; a convincing marketing story will be vital to avoid this falling flat.

For customers of the two companies, I believe it’s a positive move which won’t have anyone panicking. For Telligent customers, the immediate impact is relatively low; other than the rebranding, I would expect there to be little short-term impact, though as the two technologies start to integrate further and potential cross-overs are exposed, the technology should only get richer. For customers of ZCS Network Edition (the premium version of the software supported by Zimbra), though Telligent is a much smaller company than VMware, the Zimbra technology fits more logically here, which balances the picture out. Again, in the short term I think the impact for customers will be limited (assuming all the Zimbra support guys are included in the “core team” mentioned in the press release), although in the longer term there is scope for much greater integration of social features in the platform, which—again—will bring the ZCS client more in line with the direction that IBM and Microsoft are taking. I’m not yet sure what the future will look like for the open source project though—the Telligent press release talks about openness, but doesn’t mention the open source activities, so I’ll wait to hear more on that front.

So, at this stage, I’m cautiously optimistic about Telligent/Zimbra’s prospects for success here, and indeed I hope for both parties that they’ve finally found their route to bigger success. As ever, though, the proof of the pudding etc. etc., so only time will tell. I’m looking forward to speaking with Telligent to find out more about the details of the strategy, and I’ll report back at a later date.

In the meantime, here’s a little background reading on the two companies for you:

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