Let’s face it up until now the online apps race has been all Google, with Zoho doing a great job but always behind the eight ball because of its relative size. Microsoft has stayed out of the race and Yahoo! has been a bit-player in the email stakes.
Well, today, the market just might have heated up with news breaking that Yahoo! had acquired AJAX mail and collaboration suite Zimbra.
I’ve always been a big fan of Zimbra. It’s fantastic software, probably the best-in-town and so represents a great way for Yahoo! to kickstart an online office push. Or so I thought. On the ZDNet Betweeen The Lines blog, Yahoo!s Brad Garlinghouse is asked whether the Zimbra purchase represented a push to go after Google Apps or Zoho. To which Garlinghouse replied:
“We are focused on extending our core strength with email. The document and spreadsheet applications are not a priority at this point. We are focusing on what Zimbra has gone head-to-head with and is winning at”.
You can read this too way. ‘Not a priority at this point’ indicates that Yahoo! is definitely going to play in the online office space. But if he is genuine about documents and spreadsheets not being a priority I wonder how long Yahoo! can sit back on this.
As I’ve stated before, online applications come with a heavy degree of lock-in. It’s not easy to switch suites, certainly much harder than moving from say Microsoft Office to OpenOffice. Yes, it’s early days but there is a network-effect with these apps as well. You all need to be on the same platform to collaborate, which is the single greatest advantage of online productivity applications, so it’s not a market you want to give a start in, IMO.
I’d be surprised in Garlinghouse’s response isn’t a smokescreen and I agree with Michael Arrington’s suggestion that a Zoho acquisition would be next, indeed it’s a move I’ve tipped any numbers of time here on Squash. But again, the longer Yahoo! waits the harder it’s going to be to integrate everything together for when this market real takes hold.
Once you’ve started playing with an online suite, you’ll never go back to just email. Yes, email is the single most important piece of the puzzle (and which has always been the chink in Zoho’s armour) but as a stand-alone offering it’s going to be increasingly an island. Just as we make desktop suite decisions, we’ll invariably do the same online. Yahoo! has made a great start with Zimbra but if it thinks it can move in typical Yahoo! time to move on this properly, I think it will regret it.
Filed under: AJAX Challenge
Phil Sim 
Office may be one “battleground,” and perhaps Exchange/Notes is a primary focus.
If you can open documents without downloading them, as you can in Zimbra, and is further developed with Zimbra briefcase in Z5 due November, perhaps how you compose documents is becoming less important over-all, then the ability to organize, search, and manage them effectively. Apple, for example, can open/save Excel spreadsheets faithfully in their new Numbers, and of course the ability to open/save Word documents is ubiquitous. At this point, document intercompatibility is expected on the desktop level, and is largely there. Do we need online documents, too? Isn’t that what our blogs and wikis are for?
It’s hard to say which business is more valuable, Desktop suite vs. Collaboration suite, but it’s not hard to argue that they may be independent, not have the synergies that motivate investment.