Zimbra customers spooked by Microsoft's Yahoo bid

Zimbra users fret that the open-source competitor to Microsoft Exchange will be shut down if Microsoft successfully buys Yahoo

Zimbra customers are deeply concerned about Microsoft's bid for Yahoo because they feel that the deal would mean the end of the Zimbra collaboration and communication suite.

In October, Yahoo acquired Zimbra, whose suite competes with Exchange and has a heavy open-source component. For those reasons, it will not fit with the product strategy at Microsoft, which will likely pull the plug on its development and put it out to pasture, Zimbra customers are saying in interviews, blog postings and discussion forums.

"It's pretty terrifying for me," said Cedric Halbach, senior systems administrator at The Metropolitan Companies, which has used Zimbra successfully for companywide e-mail for about two years. "If Microsoft bought Yahoo today, and it was accepted and done, I'd immediately look to transition from Zimbra to another product."

Previously, The Metropolitan Companies used Exchange, which the company found too expensive and unstable. With Zimbra, the cost for The Metropolitan Companies' 175 user licenses is about one-fourth of what it would be for Exchange, and the Zimbra software has been significantly more stable, Halbach said.

"We absolutely refuse to move back to Microsoft Exchange. We don't want to be forced to move back to it. We'd have to look elsewhere in the market for another competing program, and right now Zimbra is the best competitor," Halbach said.

A spokeswoman for Microsoft said the vendor wouldn't comment on what plans it might have for Zimbra should its $44.6 billion offer for Yahoo be successful. Zimbra didn't immediately respond to a request for comment.

At the time of Yahoo's acquisition of Zimbra for $350 million, many Zimbra customers declared themselves displeased about the deal, citing what they perceived as Yahoo's lack of expertise as a provider of enterprise software.

However, Zimbra has apparently continued executing on its pre-acquisition plan and is operating as usual, which Zimbra customers have been grateful for. On Tuesday, Zimbra officially launched the suite's 5.0 version with enhancements including support for BlackBerry devices and Outlook 2007, as well as a new to-do application for tasks management, an instant-messaging application that allows group chats and the ability to work offline with Zimbra Desktop.

"I was a bit nervous at first about Yahoo buying Zimbra, but Yahoo has made good on its word not to disrupt Zimbra," said Andy Armagost, systems administrator at Brigham Oil & Gas in Austin, Texas.

However, the Microsoft bid has him a lot more concerned about Zimbra's future. "We're all pretty much holding our breath right now," he said in an interview. "This latest news is quite more troublesome than the Yahoo news was."

"Microsoft hasn't historically been the most friendly to open-source projects. I wouldn’t have the greatest faith for the future of Zimbra if they took over Yahoo," Armagost added.

Moreover, Armagost and his boss, the company's IT manager, aren't big fans of Microsoft server software because they consider it clunky and unreliable.

"We don't have the greatest faith on Microsoft overall," said Armagost, adding that Brigham Oil & Gas is a big user of Sun servers and that it is currently transitioning to Linux machines.

Word of Microsoft's bid for Yahoo also has Benson Wong concerned. As senior real estate technologist at Sutton Group Realty Services in Canada, Wong is overseeing the implementation of the Zimbra suite, scheduled to start in March. "Microsoft has Exchange, so the concern is that it might decide that it doesn't want Zimbra at all," Wong said in an interview.

Like Armagost and Halbach, Wong isn't a fan of Exchange. At the other end of the spectrum, none of the three men would consider Web-hosted options like Google Apps because they want to have their e-mail server software installed on their companies' premises in order to have control over it.

That's why none chose the Zimbra option to have the suite hosted externally by a third party in a software-as-a-service model. The three companies use the suite's commercial Network Edition -- there's also the free Open Source Edition -- but they like the flexibility that the open-source nature of the software gives them.

In short, for them, Zimbra is the best option in the market for e-mail. The concerns from these three customers are echoed in hundreds of postings made by their peers in blogs and discussion forums, such as in this thread on a Zimbra board.

Some analysts also share this view. In a note commenting on Microsoft's bid, The 451 Group analysts forecast that Microsoft will have little interest in keeping Zimbra going: "Microsoft will have to decide what to do with Zimbra; our guess is that it will let it wither and die rather than spin it off and leave it as a threat to Exchange," they wrote.

In the meantime, The Metropolitan Companies, Sutton Group, and Brigham Oil & Gas are moving forward with their respective plans for the software while keeping an eye on the acquisition possibility.

As Halbach put it, it's a "wait-and-see" attitude at The Metropolitan Companies. "We're making strategic plans in case we had to switch: What would we choose, and how would we go about doing it?" Halbach said. "That's a nightmare scenario for us because we're going to have to change everybody who is working for us across the country. It'd be a major transition."

Copyright © 2008 IDG Communications, Inc.

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