Version 0.7.3 of the company's Open-Xchange e-mail server went to beta testing on Wednesday following the decision to publish the source code under a GPL license six weeks ago.
Frank Hoberg, the chief executive officer of Netline, said this release shows the open-source business model works. He said the company had been able to significantly speed up development by collaborating with the open-source community.
"If we had done everything for this release ourselves--the development and testing--it would have taken 10 times longer," Hoberg said.
The product, previously available on SuSE Linux only, can now be installed on six of the major Linux distributions: Debian, SuSE, Red Hat, Slackware, Mandrake and FreeBSD.
The server can be connected with a browser or an e-mail application, which will allow users to access offline content. It is compatible with the open-source browsers KDE Konqueror and Mozilla Sunbird, or with any other browser that has implemented iCAL, a standard for exchanging calendars.
Hoberg said the company has had a positive response from the open-source community to the release of the software under a GPL license. In the last six weeks, it has not only been able to make the application available under additional Linux distributions, but more than 1,000 open-source developers have signed up to its mailing list and several hundred have submitted bug reports.
The company said it released the source code to speed up development and to enable the application to be more thoroughly tested.
"Our developers can now focus on developing functionality, rather than testing. Fixing bugs is not a problem, but finding the bug and the reason why it is not working is the most difficult."
Netline claims to have seen an increase in sales since its decision in August to move to open source. The company reports that profits this year are 25 percent to 30 percent higher than in same period last year, with sales particularly increasing in August and September.
Hoberg said the new business model--providing a free version of software that is also sold--is the only scalable model that allows the company to compete with Microsoft Exchange and Lotus Notes, which dominate the market. Open-Xchange's share of the market is less than 1 percent, although it hopes to expand this to 5 percent in the next two or three years.
Hoberg warned that timing is important for a company that decides to adopt this model. He said that the time was right for the product, which is relatively mature after having been developed over the last eight years since the company was founded. He said the timing is also right for the market, which now has various commercial open-source enterprise applications, including the application server JBoss and the database MySQL.
"Open source is good to move the momentum to a higher level, but you have to have the momentum in the first place through a strong brand," he said.
Netline plans on releasing two independent commercial offerings of the product in the first quarter of 2005--one for Microsoft Exchange administrators, and one for expert Linux users who want to be able to choose which Linux distribution they run the product on.
Open-Xchange is available for free download from Netline's Web site.
Ingrid Marson of ZDNet UK reported from London.