Shape of Things To Come: VMware Divests Itself Of Zimbra

VMware and Telligent announced today, the sale of Zimbra to Telligent. Zimbra is an e email, calendar and collaboration suite which VMWare acquired from Yahoo only three and a half years ago (February 2010). It is basically an alternative to Microsoft Exchange with a similar feature set. Besides a commercial edition, Zimbra also has an open source version.

Zimbra, along with Socialcast, has been a bit of an anomaly at VMware. While the mission of VMware is firmly understood to be virtualized IT infrastructure, including software-defined datacenters, both Zimbra and Socialcast are clearly enterprise communication and collaboration software products. Neither really fit with other product lines at VMware except in the most tenuous manner. Zimbra could be considered IT infrastructure more than an application but it’s not the same type of infrastructure. VMware lives squarely in the virtualized hardware world of servers and networking while Zimbra is pure software infrastructure. The same arguments could have been made for acquiring a NoSQL database or an analytics company.

The announcement generates two questions immediately. First, is this part of a wider trend? Will we see more companies divesting themselves of products that don’t really fit with the rest of the product lines? Second, what does this mean for Socialcast?

The answer to the first question is “Yes. This is a trend.” Or at least will become one. Too many companies have purchased or developed products that are so far out of line with their core offerings that they make little sense. These products become internal oddities that customers, channel partners, and a vendor’s own sales force doesn’t know how to connect to the rest of the company’s products. In the gold rush to leverage the social, mobile, and cloud trends, too many companies have gone too far afield. There is too little leverage between these misfit products and the rest of the company’s portfolio. Cisco and Citrix also come to mind with their excellent social enterprise offerings that should, at the very least, be a separate brand and probably sold off.

The second question is much harder to answer. Socialcast was not included in the Zimbra asset sale. That is understandable from Telligent’s perspective since they already have social networking products. Without Zimbra, Socialcast is now a serious outlier in the VMware product mix. At present, it appears that Socialcast is staying and being aligned with the Horizon suite and Personal Desktop products. It’s still hard to see the synergy there. Zimbra made more sense as a portfolio partner since both are part of an enterprise communications solution. Horizon is still a virtual infrastructure product, designed to make it easier to deploy IT resources. Socialcast is nothing like that.

Finding a buyer for Socialcast may be tough. There are so many companies that already have enterprise social networking products and many smaller players that would be less expensive to acquire. That may be a reason for VMware to hold onto Socialcast longer – it has no place good to go. Still, Socialcast is a full featured product that has been tested with paying customers. Not all of the enterprise social network startups can claim that. That may make it attractive to a mid-market software company that is looking to add social features to their portfolio. For example, digital marketing companies that have already invested in social media marketing have a strong interest in tools that help customers build communities.

Realignment is tough medicine but makes sense in this case. Expect more companies to follow suit. There are few companies that can be all things to all people – maybe five out of all the IT vendors out there. For the rest, they have to be very good at a few things. VMware is clearly trying to gain that focus.

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