Zimbra’s steady rise

I admit it. I have spent the last year pretending that Zimbra was more hype than reality. I suppose I can be forgiven for this, given just how overwhelming the hype has been. (TechCrunch’s somewhat silly math being a prime example.)

But I had breakfast with John Robb (VP of Marketing and Product Management) and Andy Pflaum (VP of Business Development) last week and I think I’ve been wrong. Zimbra has focused on ubiquity over the past year, getting its email system into the hosting market at competitive prices and getting it in use everywhere through free trials. Zimbra’s recent Comcast deal is an example of this.

But, in my enterprise-centric view, the best of Zimbra is yet to come. As Jason Maynard of Credit Suisse argues in a recent analysis:

We think very highly of the Zimbra solution from a personal productivity perspective and hear they are soon going to be adding support for Blackberry and Microsoft Exchange integration. As software moves above a solution for a single PC, we believe it will be a core capability to deliver relevant business information to users across a wide range of devices.

That integration makes Zimbra highly relevant to enterprises in the same way that other open source business applications are: initially at the departmental level, and then spreading within the enterprise.

Think about this. Today, if Big Enterprise X wants to switch from Exchange, it’s a massive decision to make this move (either to Domino, GroupWise, Zimbra, etc.). Rip and replace is a difficult and losing proposition.

But having this integration with Exchange makes Zimbra a safe departmental decision, which decision can percolate and proliferate from this breach in the incumbent vendor’s lock on Big Enterprise X. In this scenario, Zimbra starts off as just another node on the Exchange network (similar to the value proposition that PostPath provides), and scales its ability to compete head-to-head one user/department at a time.

So, the technology is starting to look like a more compelling enterprise story. But what about organic growth?

As it turns out, adoption has already been going mainstream. John shared this data with me, which tells a fascinating story about how the market perception of Zimbra has changed. At the beginning of last year registrants with Zimbra (for network trials, etc.) gave “portal addresses” (Gmail, Yahoo, etc.) ~50% of the time, and their true corporate email accounts 50% of the time. Today, registrants are giving their true corporate email addresses 85% of the time. This is a fascinating data point. It tells me that Zimbra’s prospects trust the company significantly more today than they did last year. That they feel like Zimbra is a real company with good intentions.

In short, they trust their data/identity with Zimbra…which bodes well for how trusting they’ll be with their wallets.