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January 25, 2007

Zimbra: 6 million Paid Mailboxes

Michael Arrington

41 comments »

We first covered Zimbra back in September 2005. Zimbra is an Ajax Microsoft exchange competitor with a webmail service that thousands of businesses and organizations use to handle email, contacts and calendaring. They also offer a great mobile solution. The core product is open source, and Zimbra has a higher end version that sells for $25 per person per year (with various discounts).

Since their launch they’ve grown. And grown. They had 4 million “paid mailboxes” In October 2006. Next Monday they will announce that they now have more than 6 million paid mailboxes over 1,300 customers, a growth of 50% in three months. Sixty percent of their customers are being serviced through resellers.

They have lots of help with the product, too. They’ll be announcing version 4.5 of their Collaboration Suite (which is already available). 6,300 developers and administrators have contributed to Zimbra. The open source version of Zimbra has been downloaded “hundreds of thousands” of times.

The company has raised $30.5 million over three rounds of funding from Benchmark Partners, Redpoint Ventures, Accel Capital, Sumitomo and Duff, Ackerman & Goodrich.

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This entry was posted on Thursday, January 25th, 2007 at 11:03 pm and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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Comments

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  1. Samir

    January 25th, 2007 at 11:27 pm

    Wait, 6 million customers? You said 1,300.

  2. yongfook

    January 25th, 2007 at 11:45 pm

    Samir > 6 million accounts / paying users / customers. Therefore a decent wedge of the 1,300 direct customers must be huge resellers or big fat enterprises. This is one of the soundest business models I’ve seen on Techcrunch in a long time.

  3. Alastair James

    January 25th, 2007 at 11:53 pm

    Mike,

    >> Since their launch they’ve grown. And grown. They had 4 million “paid mailboxes” In October 2005.

    Should that be 2006?

  4. DrDoubt

    January 25th, 2007 at 11:54 pm

    Wait a minute, looking at the pricing link on their website, something doesnt add up. r u saying the company is actually making > 180 million in revenue? I think, no way.

  5. Marko

    January 25th, 2007 at 11:55 pm

    I’m sure they announced 4M mailboxes in October 2006. But a great performance anyway!

  6. Jimmy

    January 26th, 2007 at 12:00 am

    Uhh.. yeah… Misleading title much?

    According to those standards, Dreamhost has a gajillion paid accounts… See for yourself… http://www.dreamhost.com/hosting.html 3000 mailboxes on a basic account and I’m sure they have thousands of accounts.

    That’s a pretty bad metric standard to claim 50% growth by. 1300 accounts is not impressive. One of my sites has 920 accounts and gets about 10 accounts a day with no advertising… just buzz.

  7. Michael Arrington

    January 26th, 2007 at 12:12 am

    typo fixed…thank you.

    The title isn’t at all misleading - this company gets paid “per seat” with rate card pricing starting at $25 per year per seat. I am very sure that the average is far lower than that, but it is still very impressive growth and a great product.

  8. Tom Fragala

    January 26th, 2007 at 12:13 am

    Uh oh, this brings back memories. I used to work for software.com/openwave, and we ran into this issue: when to call a mailbox a paid or installed mailbox. It also becomes important when dealing with revenue recognition issues.

    It may sound straightforward, but if a reseller buys, for example, a 100,000 user mailbox LICENSE, is Zimbra counting those as “paid” mailboxes? If so, that may be misleading to people. Because none of those mailboxes may even be active. And the reseller isn’t paying anything near retail for the mailbox. Resellers might be paying a few bucks per mailbox license fee (probably not recurring revenue), plus maintenance and professional services (if any).

  9. joey

    January 26th, 2007 at 12:25 am

    Are any of the readers one of the 6 million Zimbra users? 6 months ago we my company tried it out, the install was fairly ridiculous and the actual software was clunky and hard to use, though it showed promise. Has it gotten significantly better?

  10. rob

    January 26th, 2007 at 12:40 am

    We use it- no complaints thus far.

  11. Yohay

    January 26th, 2007 at 12:43 am

    Looks like a great success.

  12. Michael Arrington

    January 26th, 2007 at 12:46 am

    The edgeio team uses it. Was very slow a year ago but apparently it’s totally cool now.

  13. Michael Arrington

    January 26th, 2007 at 12:48 am

    I changed the title to “Paid Mailboxes.” Obviously some people were confused by the original title, so it needed to be amended.

  14. Scott Taylor

    January 26th, 2007 at 12:50 am

    Congrats to them, love hearing of companies that solved a problem and are successful.

    Hats off to them :)

    -Scott

  15. steve

    January 26th, 2007 at 12:53 am

    if they had even a fraction of 6 million as paying customers, they wouldn’t need funding: but good luck to them

  16. Dana

    January 26th, 2007 at 1:36 am

    We’ve been using it for a year. It’s a great product and supported by a responsive team. Just installed 4.5. Has lots of enhancements.

  17. JasonM

    January 26th, 2007 at 1:39 am

    Its great to hear about these types of companies, with these numbers and people commenting about the service, I will have to check it out for some of our smaller clients.

  18. Rajeev Vashisht

    January 26th, 2007 at 4:10 am

    The CEO’s are now days saying that open source is ultimately good for knowledge dissemination and also user adoption may laed to a subsequent purchase.

  19. David Lavery

    January 26th, 2007 at 4:43 am

    Zimbra is indeed a fine product. I use it through a service provider in the UK and found it via this site - so thanks. My mobility previously made getting email difficult, and I didn’t see the Blackberry as worth the money for a small business (and I don’t like the handsets, and the web experience is poor etc. etc.). Things have improved greatly without Outlook, Exchange, or POP3 to worry about. The one small downside is that I have mobile connectivity, but it isn’t “push”, and it requires me to use a Windows Mobile phone using the IMAP protocol - performance isn’t great let me tell you. It could do with a J2ME client really (perhaps there is one and my provider isn’t aware yet).

  20. TenHanger

    January 26th, 2007 at 5:33 am

    $150mm or greater is the implied revenues according to your article. This sounds CRAZY high for a company I’ve never heard of before.

    $25 x 6mm paid = $150mm

    With this kind of growth rate, they should beat BEA’s record for fastest company to $1 billion in revs in tech. They also have about the same number of paid users as Netflix. Golly, I don’t know why Netflix has been painstakingly working so hard to get a few million users when this company I can’t even remember the name of has already got 6mm and growing and growing and growing.

    I suggest you check the numbers again, something is dramatically wrong.
    I mean, Yahoo and Google already do this business model for free, and I don’t know what’s so special about a company that does email, contacts, and calender. WHOOOOOWHEEEEEEEEE!!! email? contacts? calender? ALL IN THE SAME PACKAGE!?!?! Awesome!

  21. IdeaList

    January 26th, 2007 at 5:48 am

    Hmm, does the back button work now?

    Last time I tried their demo, back button logged me off…

    Their customers are either anti-Exchange folks or people who cannot afford it.

    Good luck to them.

  22. Narendra

    January 26th, 2007 at 6:24 am

    I hate when companies tout opaque numbers. If you want to boast about things with the word “paid” then list a revenue number, plain and simple.

  23. tara

    January 26th, 2007 at 6:46 am

    Has anyone tried Open-Xchange? They have a perpetual license so long-term would be less expensive. Congrats to Zimbra on their success though, their growth rate iis amazing.

  24. James

    January 26th, 2007 at 7:44 am

    I just wish they had betting open source installation instructions.

    I’ve tried maybe a billion times to install it on my dedicated server but can’t figure it out.

    Other than that it looks awesome.

  25. RobertoSucco

    January 26th, 2007 at 8:32 am

    Do you think this will make my Open Source stocks rise? :) http://iam.always.online.fr/tr.php?wordid=2012

  26. Jason M. Lemkin

    January 26th, 2007 at 9:16 am

    Impressive any way you slice it. Even at $0.50/mo/paid after discounts + rev share with channel partners, that’s a $3m/mo run-rate to build on.

    Will be interesting to see where corporate version of Gmail goes

  27. phil

    January 26th, 2007 at 9:25 am

    I find it bizarre they don’t offer a hosted product. Yeah, through partners, but why let others take a cut? Salesforce.com has the right model.

  28. ryan

    January 26th, 2007 at 9:35 am

    Hi Mike,

    I would recommend editing or deleting the first comment due to the web preview from Snap that shows up when their name “Wonderful Person” is moused over. Just thought you should know.

  29. Pete

    January 26th, 2007 at 9:45 am

    Is that Spam?

  30. Conference Guru

    January 26th, 2007 at 11:05 am

    Numbers don’t add up to me? Got to remove that first comment as well.

  31. Jordan Willms

    January 26th, 2007 at 2:05 pm

    God bless the classic low market disruption. Google has been there. Looks like it’s open source’s turn.

    http://www.sumolabs.com/blog/z.....-microsoft

    J | sumolabs.com

  32. BlogReader

    January 26th, 2007 at 2:37 pm

    Why do they post stuff about “paid” (wink wink) members but not revenue numbers? This is like Baskin Robbins counting each sample handed out as a paid customer.

  33. DB

    January 26th, 2007 at 2:58 pm

    Our small business of 30 people are using Zimbra as our mailserver, and have done so for 9 months now. The install was (unlike some commenters claim) extremely easy on RedHat (debian version not available when we installed the first time).

    The webmail system is smooth, has an integrated calendaring function, is easy to use and can sync to many mobile devices..

    The support is excellent, and yes I would much rather pay Zimbra the per seat pricing for this than Microsoft for Exchange (which I can’t run on Linux anyway..) Zimbra is also providing anyone in our organization with proper email, regardless what platform they’re running, and where they are.

    Their administration kit is also worthwhile, but what could have been better is the online documentation (via man pages)..

  34. Michael Arrington

    January 26th, 2007 at 4:48 pm

    ryan, thanks. done.

  35. rulepark

    January 26th, 2007 at 5:21 pm

    They r earning. It is a cash cow business model. Why do they still need funding? The figure is over convincing!?

  36. V Lee

    January 26th, 2007 at 9:35 pm

    Paid Configured Used…

    While decent growth, I would like to see what real $$ is and real configured numbers are and what real Used mailboxes is.

  37. Tim

    January 27th, 2007 at 12:37 pm

    I’ve switched to Zimbra as a consilidated package for managing users, E-mail services and spam/virus detection. The only complaint I had is that I’ve had to swap to a different OS than my company standard to run this app, however, I have been pleased so far. The AJAX interface is a little sluggish, but I’m looking forward to the simpler web/html based interface in v4.5 I use it for my primary tool for managing email, via the web interface, Mail.app/iMAP or from my HipTop device - No problems. Hands down more versitile app than Exchange, and as DB noted, you don’t need to use Windows to run Zimbra.

  38. Garth

    January 30th, 2007 at 4:02 pm

    Things like the H&R Block deal add a lot of mailboxes to the numbers too.

    They have almost 135,000 employees, and I imagine they pay a very low per mailbox rate for their employees. Microsoft is trying to get this business back, so it will be interesting to watch.

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