Yahoo sells Zimbra to VMware

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Yahoo has sold off its open source cloud email arm to virtualisation leader VMware.

Called Zimbra, the service has over 55 million mailboxes and grew by 86 per cent in 2009 alone.

Yahoo only bought the company in late 2007 for $350 million. However, the money swapping hands to pass it on to VMware has been kept out of the public domain.

VMware is keen to build on its cloud computing offerings as businesses get increasingly used to the technology.

Brian Byun, vice president and general manager of Cloud Services at VMware, said in a statement: "Over the coming years, we expect more organizations, especially small and medium size businesses, to increasingly buy core IT solutions that deliver cloud-like simplicity in end-user and operational experience."

He added: "Zimbra is a great example of the type of scalable 'cloud era' solutions that can span smaller, on-premise implementations to the cloud.”

The deal is expected to be completed in the first quarter of 2010.

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