Yahoo paid $350m for Zimbra, the web email and collaboration software company, last September, but one wonders how much of that perceived value could be destroyed by Microsoft’s bid for the Sunnyvale company.

Zimbra today released version 5 of its collaboration suite. It adds synchronisation with Microsoft’s Outlook 2007, Blackberry email support, a version for mobile web browsers, instant messaging and an offline capability, among hundreds of enhancements.

Zimbra already resembled a browser-based version of Outlook with added bells and whistles. Hovering over Inbox names reveals contact information, mousing over an address in an email triggers a Yahoo map.

Yahoo plans to incorporate many of Zimbra’s features in an update of its Yahoo Mail service later this year, but Zimbra’s main focus has been on business, making it a direct competitor of Microsoft in the enterprise.

Its software is open source and it says it received passionate feedback from 13,500 open-source community members and customers on it latest version.

But one wonders what those passionate customers would do if Microsoft took over. Many will have chosen Zimbra precisely because they have rejected Microsoft solutions such as Outlook, Exchange and its “Live” services.

Microsoft could seek to replace Zimbra’s open-source software stack with its .Net framework, a move that would definitely turn off the faithful.

And while the latest version has plenty of appeal, the threat of a Microsoft acquisition must be giving many potential new Zimbra customers pause for thought.

The Yahoo subsidiary is just one of many services competing with Microsoft that face some kind of rationalisation in the event of its bid succeeding.

February 5th, 2008 in Internet, Software | Permalink