Zimbra, one of the poster children of cool for Web 2.0 applications, is more than just a pretty interface and collaboration and messaging platform with mashups (see Richard MacManus' review). The company announced that is has more than 4 million paid mailboxes.
Impressive, given the company has only been selling subscriptions in March of this year. Zimbra, a private company with about $30.5 million in venture funding, won't reveal its revenue numbers. The press release states the prices: "ZCS 4.0 Network Edition pricing starts at $25/mailbox/year for a minimum of 25 users for the Standard Edition, which includes product support as well as software subscriptions to new releases, updates and patches. Additional discounts are available for larger organizations."
Marshall Kirkpatrick of TechCrunch takes the $25 per seat per year pricing and estimates that Zimbra is doing at least $100 million in annual revenue, assuming the numbers are accurate.
The numbers are not exactly accurate. Zimbra CEO Satish Dharmaraj told me that the revenue numer is a mix of enterprise ($28 a year), SMB hosted ($1.75 per month) and consumer service provider deals ($3 per year). He emphasized that 100 percent of the revenue is recurring annual subscriptions. Zimbra also has a free open source edition of Zimbra Collaboration Suite 4.0, which like the low price, is part of a strategy to build the community and user adoption, without price being a barrier.
My guess would be the revenue is under $20 million, which is still a healthy business for a Web 2.0 startup in a very competitive space that includes Microsoft, Google, Scalix, IBM, Novell, Yahoo, etc. Zimbra has signed up more than 50 .edu accounts, which appreciate the Web 2.0 features (AJAX, Zimlets, mashups, skins),; support for Outlook, Apple iSynch, and mobile synching; and the price--not $25 per user. In addition, Zimbra has also had success with hosting providers supporting small business users.
For a comparison, Scalix, another private company with AJAXed email, calendaring and an open source edition, has
more than one million [see below] mailboxes across mostly enterprise and SMB accounts, according to Glenn Winokur, Scalix CEO. "We really don't run into Zimbra competing in the marketplace all that much--except perhaps in the North American SMB segment," Winokur told me in an email.
Update: I have a note into Scalix about its one million Scalix mailboxes. It's unclear just how many of the one million mailboxes are paid and how many are the free, open source Community Edition.
Update 2: Winokur said that the one million refers to non-paid, free community edition usage. He was not willing to provide a specific number of paid subscribers, but said that Scalix has over 450 customers, with two-thirds in the SMB space and 10 percent with 5,000 to 15,000 seat deployments. Both Scalix and Zimbra are taking advantage of dissatisfaction with the incumbent email providers, especially Microsoft Exchange. Scalix doesn't have millions of paying subscribers at this point, but its revenue is likely in a similar range to Zimbra's. Unfortunately, private companies don't have much to say about revenue unless it's a really good story.