Open-Xchange sells Exchange-like collaborative applications to service providers. It also offers Exchange-like services as a SaaS to small businesses.
Technology Summary
- Java code on server providing all Exchange-like collaboration features: calendar, contacts, tasks, folders.
- Customer has choice of underlying email server technology.
- Sold to service providers, who already have their own email infrastructure in place; service provider installs Open-Xchange on its own machines.
- Also sold to SMEs via channel partners.
- Open-Xchange integrates tightly with the service provider's email infrastructure.
- Multitenant design.
- Outlook on end customer's system connects to the service provider's system via plugin.
- Ajax-based Web browser interface provided.
- Apple client support in development.
Main Types of Customer
- Service providers, who have an email offering and want to add Exchange-type collaborative functions. Open-Xchange is targeting the top 50 hosting providers; e.g. RackSpace, GoDaddy. Customers include Network Solutions, 1and1.
- SMEs, 5 to 50 users, seeking a hosted email and collaborative solution. These use Open-Xchange via service provider offerings.
Illustrative Pricing
- SaaS for SMEs (direct sale): 875 euros ($1,220)/year for up to 25 users; 35 euros ($49) user/year for 25+ employees.
- Software for service providers: Normally a revenue share. End customer charged from $2 to $5/user/month.
Main Competition
- Service providers: Microsoft's Hosted Exchange. Zimbra used to compete, but doesn't since it was acquired by Yahoo recently.
- Mainstream vendors of messaging software for service providers--e.g., Bizanga, Critical Path, Openwave--aren't competition because they are focused on email, rather than the collaborative surrounding applications.
- SMEs seeking hosted solution: Google, Yahoo.
Competitive Strengths
- Lets service providers sell an Outlook-based solution while paying much lower licensing fees to Microsoft; hence allows service providers to offer Outlook/Exchange functionality at much lower monthly costs.
Company and Finances
- Founded 1996.
- 40 people.
- Not yet profitable.
- Ferris Research has preliminary revenue guesstimate at $3M/year.
- $9.9M of funding so far; 18% from Baytech Venture Capital, 49% from angel investors, 33% from employees.
- About to close a further $10M round.
- Company originally called NetLine.
Other
- An important issue is how well Outlook collaborative functionality is maintained. With plenty of Outlook plugins, a lot of capabilities get grayed-out.
- Maintaining rich Outlook compatibility is hard to do.
... David Ferris