Open source e-mail vendor Open-Xchange is claiming that it has landed its largest customer win yet in the form of 1&1 Internet Inc., one of the largest Web hosting companies in the world with over 1 million e-mail accounts.

The win is another proof point for vendors of open source e-mail and collaboration as they seek to compete against Microsoft's Exchange e-mail application.

Terms of the deal were not publicly disclosed, though Paul Sterne, CFO and general manager of Americas for Open-Xchange Inc., told internetnews.com that the deal was a multi-million-dollar deal spanning many years.

Open-Xchange will be providing hosted e-mail and collaboration for 1&1 customers first in Germany and then later in other countries including the U.S., U.K. and France. Customers will be able to purchase the new services as a standalone offering or as an add-on to an existing hosting agreement.

The move to Open-Xchange's platform is not expected to involve any migration hardships for 1&1.

"1&1 has a homegrown Web mail infrastructure that they will continue to use," Sterne said. "No migration is required because Open-Xchange sits on top of the existing Web mail infrastructure and simply adds functionality in terms of shared, secure e-mail, calendar, contacts, tasks and Infostore, which includes document sharing/versioning/locking, knowledge entries and bookmarks."

Sterne noted that 1&1 evaluated a number of competitive offerings and determined that the architecture of Open-Xchange was best suited for its existing open source infrastructure.

Sterne added that 1&1 did not disclose who the other bidders were, nor what the value of the bids were.

It is not clear whether or not open source e-mail vendor Zimbra was among those that bid on the 1&1 business.

Internetnews.com was unable to get a comment from Zimbra for this story as of this writing.

Zimbra recently issued a press release claiming that it had crossed the six million paid mailbox threshold, spread across some 1,300 customer deployments. Additionally, Zimbra claimed that it's business had grown by 50 percent in the past three months.

"Open source software has played an integral role in the rise of the Internet but to date most of that software has been hidden in the plumbing of the Web," said Sara Radicati, president and CEO of the Radicati Group in a statement.

"The Open-Xchange partnership with 1&1 shows how open source can now also emerge as a mature application that can scale to meet the needs of consumers and businesses."

The hosted e-mail account business is actually a key target for Open-Xchange in 2007 and moving forward.

"We predict a rapid worldwide transition from the current paradigm of Web mail bundled with a hosted Web site to enterprise-class groupware based on an AJAX front-end bundled with a hosted web site," Sterne said. "Any Web hoster who does not make the transition will be competitively challenged."