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Zimbra notches 100 percent growth

Yahoo may not know what to do with Zimbra, but with 50 million paid mailboxes and counting, Zimbra clearly knows how to build a business.

Matt Asay Contributing Writer
Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.
Matt Asay
3 min read

Lost in the news of Zimbra's release of version 6.0 of its collaboration suite is the importance of one very big number: 50 million. That's how many paid mailboxes Zimbra claims now, a number that puts it within spitting distance of IBM Lotus Notes (approximately 145 million paid mailboxes) and Microsoft Exchange (approximately 175 million paid mailboxes). Whatever the truth to rumors that Zimbra is up for sale, Zimbra is an appreciating asset for Yahoo, not a depreciating one.

For one thing, it's important to consider just how explosive this growth has been. In January 2009, Zimbra was at 20 million paid mailboxes. By March, that number had jumped to 40 million paid mailboxes, perhaps a consequence of Comcast mailboxes coming online. (Comcast chose Zimbra to power its Web mail service in 2007.)

That's a lot of growth in a very short period of time. Zimbra appears to have more than doubled its business in the past year.

In fact, if you track the paid-user data for Zimbra, it's very apparent that Zimbra's momentum has been increasing since its Yahoo acquisition, not decreasing.

Such momentum is built on a vibrant, growing community. Zimbra has roughly 10,000 active members on its forums, growing from 5,000 total forum registrations in 2006 to more than 20,000 in December 2008, the last date for which I have accurate data.

At the time of its acquisition in 2007, Zimbra was generating approximately 30,000 downloads per month, a number that has held constant even as a greater proportion of its community elects to pay for Zimbra's Professional Edition.

Yahoo may not know whether it wants to be an enterprise software company (Hint: it doesn't), but Zimbra definitely stands out as an enterprise software product. While the company used to mainly find traction with universities and SMBs, its customer list now includes companies like Bechtel, Century21, H&R Block, Raytheon, and more.

Perhaps as a sign of this growing enterprise clout, Zimbra has caught the eye of Red Hat, which works closely with Zimbra, most recently jointly selling to the Peruvian government.

ZDNet's Larry Dignan may be right in suggesting that Zimbra's news appears to package the company for a sale but, again, even if so, it's clearly because Yahoo doesn't know the way to sell enterprise software, and not because Zimbra can't. If Zimbra continues to grow as it has, within a year it will be taking significant market share from industry leaders IBM and Microsoft.

Zimbra has already caught Microsoft's attention. With Zimbra's 50 million paid users, apparently Redmond is not the only one to notice the company.

Update @ 3:29 Pacific on September 30, 2009:

It's true, as reflected in the comments, that at least some of this growth is due to more and more Comcast subscribers coming online. Surely such users are, on average, not as active as IBM or Microsoft email customers, which tend to be corporate users. Point taken.

But I think this is also a complaint that makes less and less difference as a greater share of Zimbra's customers are enterprises, as reflected in its recent Bechtel deal. There are only so many Comcasts (though I doubt Zimbra would be disinclined from signing up more), but that's not the future for Zimbra, anyway. Enterprises are.

Hence, it may be momentarily inaccurate to compare apples (Zimbra) with oranges (IBM/Microsoft), Microsoft's own internal positioning against Zimbra, as linked to above, suggests that Zimbra's competitors recognize the threat and don't pooh-pooh its numbers as "just Comcast."