Interview: Zimbra turns to channel as competitive weapon

IDG News Service sat down with CEO Dharmaraj to talk about Zimbra, its competition and recent developments in open source

Open-source collaboration software vendor Zimbra is adopting an intriguing approach to taking on proprietary titans like Microsoft and Google, using its channel partners as its competitive muscle.

The aim is for Zimbra to step completely out of directly selling the commercial versions of its products so the startup can focus fully on software development and support, according to Satish Dharmaraj, Zimbra's ebullient co-founder and chief executive officer.

It's a particularly interesting time to head up an open-source company in the wake of several surprising recent developments. Among them were Sun Microsystems' decision to use the GNU GPL (general public license) to open source Java and Oracle's move into providing what it terms full enterprise support for Red Hat's distribution of Linux.

Prior to founding Zimbra and executive positions at messaging software companies Openwave and Onebox, Dharmaraj was at Sun's JavaSoft division where he was a prime mover in designing and implementing JavaServer Pages (JSPs) technology to create dynamic Web content.

IDG News Service sat down with Dharmaraj to talk about Zimbra, its competition and recent developments in the open-source arena. An edited transcript follows.

IDGNS: What's your take on Sun's open sourcing of Java?

Dharmaraj: It's great news. It was surprising they're going with GPL. I only wish they'd done it four years before when the open-source movement was getting started. It would've killed, stopped [Microsoft's] .Net from ever having been. They [Sun] made a mistake.

IDGNS: And, your thoughts on GPL?

Dharmaraj: GPL is whatever [Richard] Stallman [the creator of GPL] decides it is. We chose to go with the Mozilla Public License [MPL] primarily because it allows downstream value-add by developers who can decide on their own whether to open source. It's more like the Lesser GPL.

We had a long debate on whether to go GPL or MPL. Firefox uses MPL and Mozilla is respected. We didn't have to worry what the hell is going to happen with GPLv3.

There's a shift going on. Companies are open source, but at the same time they need to feed their developers and run a company. Traditional GPL companies have been hobbyists. It's all pure speculation about what will be in GPLv3. [The license is currently in draft form.] Stallman is trying to really restrict all the commercial benefits of GPL. The philosophy of the Free Software Foundation is that software should be totally, totally free and companies shouldn't benefit from it ever. Ironically, Red Hat and MySQL are the ones he's killing with it.

IDGNS: What do you think about Oracle's move into Red Hat's territory?

Dharmaraj: There are inherent risks of the open-source model. It's a lot more than putting source code out there. You allow your competitors to take your code and compete with you on price and efficiency. Now Larry's joined the Linux market, Red Hat and Suse need to roll up their sleeves and compete more on price and efficiency. I don't think it's predatory per se, but Linux didn't need another vendor to split the pie. Why doesn't Oracle focus on the enemy, proprietary vendors, and go shooting at Redmond? From the purely customer perspective, it might actually be a good thing giving users one throat to choke if something goes wrong with the database or the Linux kernel.

IDGNS: Turning to Zimbra, how do you position yourself against your open-source competitors Scalix Corp. and Open-Xchange Inc.?

Dharmaraj: There are two ways to go about open source. You can take what Microsoft Exchange did and do an open-source version of it and do it on top of Linux. That's what they both did. There's no way you can win competitively with Microsoft with that approach. When we launched Zimbra, our entire goal was to create something unique, with a lot of things Exchange doesn't have like hierarchical storage management. With our Thanksgiving release [Zimbra Collaboration Suite 4.5], we're offering integrating archiving and cross-mailbox search.

IDGNS: Some analysts have suggested times when it's not appropriate to substitute Zimbra for Exchange, particularly if users want tight integration with other Microsoft software. What do you think?

Dharmaraj: If you're using Active Directory and Outlook, then you can slot in Zimbra. If you're using SharePoint, we still don't have integration with SharePoint. We're not particularly looking to add it. We're not hearing from the market that it's a big need. It sounds as though when Microsoft launches Exchange 12 next year, SharePoint will be mandatory to roll out Exchange. That could be beneficial to us.

IDGNS: Looking ahead, will Google and Yahoo Inc. pose more of a competitive threat to Zimbra than Microsoft?

Dharmaraj: Absolutely. The biggest threat lies with Google and Office Live. Pardon me for being cocky, but compared to even Google we're already two years ahead with our business application, and Google is ahead of Microsoft. We won't compete person-on-person. We'll let our channel partners compete, like Tata Broadband in India and Orolix in Brazil. We don't compete with our channel since we don't host applications ourselves.

IDGNS: What's the current split of your business between indirect and direct sales and where would you like it to be?

Dharmaraj: It's 70 percent indirect and 30 percent direct. We hope to see it as 100 percent indirect and zero direct.

IDGNS: What about tie-ups with broadband providers in the U.S.?

Dharmaraj: We're talking to a lot of service providers here. They have the same fear as overseas ISPs have. They don't want to be a bit pipe. If they're only a bit pipe, the stickiness of their customers is lost. Most of the providers aren't in software development and all of them have a small business division.

IDGNS: How many users and paying customers does Zimbra have?

Dharmaraj: We have 4.5 million users and about 450 paying customers.

IDGNS: You called the company after "I Zimbra," the title of a song by rock band Talking Heads. Do they know?

Dharmaraj: No, I would love for them to know. I'm a huge fan of David Byrne [the band's lead singer]. As an open-source company, the trademark is the most important thing for you. You could take our code, but you couldn't call it Zimbra Collaboration Suite. It's a unique mark. We were called Liquid, but it wasn't unique enough. We had a little contest to name the company. Both Scott [Dietzen, Zimbra's president and chief technology officer] and I went to see David Byrne play and we both said, 'What about Zimbra?' I've promised the company that when we go public we will have David Byrne come and perform.

IDGNS: So, when are you going public?

Dharmaraj: Not any time soon. We love being a private company. Definitely not in 2007, we'll probably start thinking about it in 2008.

Copyright © 2006 IDG Communications, Inc.

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