Open-Xchange: Open Source Email Nears 10 Million Paid Users

Open-Xchange, which positions itself as an open source alternative to Microsoft Exchange, has a message for solutions providers: Yes, you can make money by blending open source applications with software as a service (SaaS). In fact, Open-Xchange is nearing 10 million paid users, and the company has a few surprises in store for 2009. Here’s the scoop.

Rafael Laguna de la Vera, president and CEO of Open-Xchange, offered up the following thoughts to The VAR Guy:

1. Paid Users: Open-Xchange quadrupled the number of paid users to 8.4 million in 2008, suggesting the company is rapidly approaching 10 million paid users

2. Software as a Service: More and more of the deployments involve solutions providers hosting Open-Xchange for their customers. In other words, VARs are becoming SaaS centers. And CEO Laguna de la Vera says Open-Xchange has no plans to host applications for customers. Translation: The Open-Xchange SaaS market is designed purely for channel partners.

Plenty of open source companies are making similar moves. Earlier this week, The VAR Guy described how OpenBI — an IT consulting firm — built a business intelligence system in Amazon.com’s Elastic Compute Cloud. The system is based on Pentaho’s open source software.

3. Global Focus: Sure, Open-Xchange’s largest installed base is in Europe, but the company’s momentum is accelerating in North America. Roughly 20 to 25 percent of Open-Xchange’s revenue now comes from North America.

4. Social Networks: Watch for Open-Xchange to launch a new server release that allows users to manage all of their social network communications (FaceBook, LinkedIn, MySpace, Plaxo, etc.) sometime this year.

5. Investment Protection:  Most Open-Xchange pundits already know this. But for the novices out there, Open-Xchange’s back-end server works with most email front-ends, including Microsoft Outlook.

6. Internet Service Providers: Watch for Open-Xchange to pursue relationships with broadband service providers, positioning Open-Xchange as an email system for consumers.

7. Higher Education: Traditionally, this has been a strong area for another open source email system: Zimbra (ranked No. 6 on The Open Source 50, which tracks the most promising open source partner programs). But looking ahead,  Laguna de la Vera expects Open-Xchange to overtake Zimbra within colleges and universities. How? Stay tuned.

Overall, it sounds like Open-Xchange continues to gain serious momentum with European SaaS and channel specialists. But this is no longer “just” a European story. With nearly 10 million paying users worldwide, Open-Xchange has built an ecosystem of solutions providers seeking recurring SaaS revenues.

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