Will 11 million paid Zimbra mailboxes add up to $66 million?

I was on Zimbra's site today looking for the latest update to its excellent Desktop product, and came across the news that open-source Zimbra now has 11 million paid mailboxes. This might still be small potatoes compared to IBM's Domino and Microsoft's Exchange, but it signals tremendous growth from Zimbra, as a quick Google search confirmed.

Back in October 2006, Techcrunch reported 4 million paid mailboxes for Zimbra. By January 2007, the number had jumped 2 million to 6 million paid mailboxes.

In the space of a year, then, Zimbra has roughly doubled its customer base. Let's correlate this to sales.

The company expected to hit $20 million in 2007 (and was on track to do just that as of September 2007, when Yahoo! acquired Zimbra), the year that it probably bumped up against 9 million paid mailboxes ($2.22 per mailbox). It did $6 million in 2006, the year that it had 4 million paid mailboxes ($1.50 per mailbox).

If my math is anywhere near accurate (not a good assumption, as Marc Fleury will tell you :-), the value to Zimbra of each mailbox may be growing at a 48 percent clip year over year, while the number of paid mailboxes roughly doubles.

So, if we assume the value of the mailboxes rises to $3.29 in 2008 (Improved brand and product causes customers to spend more money with Zimbra), and paid mailboxes to increase to 20 million, then Zimbra ends 2008 with roughly $66 million in sales.

Even if we assume the value of the mailboxes doesn't rise at that rate, but stays flat (a reasonable bet in a down market), Zimbra still ends up doubling its sales to $44 million in 2008.

Pretty impressive growth, especially in a market where the top-two providers, IBM and Microsoft, have such dominant positions. It points to the value of tight execution and an open-source lead machine.

Disclosure: After months of using Zimbra, I am an unabashed fan leaving me hopelessly biased in its favor.