So what happens to the code now? Well, read the licenses and wherever it says Yahoo, insert Microsoft, because that it how is will read if Microsoft is successful in its bid. Actually, my expectation is that Microsoft will kill the project.

The thing to remember about licenses is that while business partners may pressure you to make the license more business-friendly, that same friendliness can enable hostile players to take your project in directions you won't like. Maybe the best way to think about a license is to ask yourself: if Microsoft somehow got control of my code, then what would happen to it? Choose a license accordingly.

Some of the code is available under the GPL, I understand, but there have been issues trying to get source. Now we see what mixed licensing results in. Trying to be FOSS and proprietary is tricky.

Thousands of community members have written code for Zimbra for free. Happily, those who were sensible enough to protect the code with the GPL will be able to take it and fork. As for the rest, who knows? Those who chose other licenses will find that Microsoft knows how to squeeze a license for all the rights it wishes to hold, and the full impact of that may fall on Zimbra. Live and learn.

Update: Zimbra's CEO has made a statement that includes this section:

Many businesses, partners, Higher-Eds and ISPs have committed to Zimbra by becoming paying customers. And there is an even larger set that is part of our open source community. We just made an irrevocable contribution of Zimbra 5.0 to the open source. No one can take that away. We will remain true and faithful to our contractual obligations and will do everything possible to make sure that our biggest assets - you - remain confident that we are here to stay and execute. Thankfully, I can confidently say that the Zimbra movement is bigger than any one company.