Several years ago, I had a chance to talk to Satish Dharmaraj, the CEO and cofounder of Zimbra. He told me that the company spent two years building a sophisticated email system (in stealth mode) – and was using some cool Web 2.0 capabilities.
Since then, the company has continued to innovate. More importantly, Zimbra has been picking up a lot of customers (the current count is over 1,300). Some include Comcast Corporation (Nasdaq: CMCSA), Embarq Corporation (NYSE: EQ), Raytheon Company (NYSE: RTN), H&R Block, Inc. (NYSE: HRB), and Century 21.
Well, the hard work has paid off; that is, Zimbra has fetched $350 million in a buyout from Yahoo! Inc. (Nasdaq: YHOO).
No doubt, Zimbra's messaging platform has some slick features. But it's also sturdy enough for intense enterprise environments. For example, Zimbra allows for archiving and on-site deployment – which are essential capabilities in the Sarbanes-Oxley world.
Yahoo is a dominant player in email, with about 250 million registered users. Now, with the power of Zimbra, Yahoo can expand into corporate environments. In other words, there will be even more pressure on Microsoft Corporation (Nasdaq: MSFT)'s Office franchise.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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