Snapshot: Open-Xchange, Hosted Exchange Software for Service Providers

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.


  • 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

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