Yahoo Acquires Zimbra For $350 million in Cash
September 17, 2007 1 Comment
Those of you who regularly read this blog know I am a huge fan of Zimbra. I was quite interested to hear that they were just acquired by Yahoo! for $350 million in cash. As many Open Source acquisitions of late, that’s a fairly stunning multiplier (and the fact that it’s an all cash deal makes it even more so). This is a slightly different move than the Semel-run Yahoo! would have made. They wanted to be more of a pure Media play back then. With this move they are going more toward the Enterprise market, which is a place Goggle has been headed recently as well. This move should also serve to catapult Yahoo! into direct competition with Microsoft, which has traditional been an ally. Zimbra has the potential to be a legitimate Exchange killer, which would certainly draw the ire of Redmond. For medium sizes installations, Zimbra is ready for prime time already. I’ve worked on a Zimbra implementation that was adding 25,000+ accounts a week and at that size there were still some growing pains. With the experience Yahoo! has at scaling and the additional resources they can provide (along with some changes that Zimbra already had in the pipeline), I’d expect Zimbra to be ready for the largest of installations very soon. Note that rumors of a Microsoft-Yahoo! merger have been going on and off for years. That deal would now be a huge blow to Zimbra IMHO, so it’s something to watch out for.
On the note of Open Source multipliers, Matt just posted this:
Let’s tally up the list:
* Zimbra – $350 million (on ~$10 million (guessing here, but guessing at the high end, I think) of trailing revenues) – September 2007
* XenSource – $500 million (on $1 million in trailing revenues) – August 2007
* JBoss – $350 million (on $27 million in 2006 revenues) – June 2006
* Sleepycat – $35-50 million (on ~$7 million in trailing revenues, is my best guess) – February 2006
* Gluecode – $10 million (on very little in trailing revenues, less than $1 million, I believe) – May 2005
* SUSE – $210 million (can’t remember revenues – I think $30-40 million) – November 2003
* Ximian – ~$50 million (I can’t remember – on $1 million or so in trailing revenues) – August 2003
What’s the trend? Bigger. We are in the midst of a Gold Rush, as Dana Blankenhorn has written. The rules of software business are being rewritten, and those who understand them will make a lot of money for shareholders…and themselves.
Makes you wonder who the next Open Source acquisition will be.