We do not offer email hosting. However, you can setup a mail server on a droplet, or use an email hosting service such as Google Apps.

For your mailbox - Google Apps or Rackspace email.
For you app - Sendgrid, Postmark or Amazon SES.

We have no plans to offer managed email hosting as that has already been done by quite a large number of companies and without constant attention to that product we wouldn't be able to provide as good a user experience as other companies in this space.

We'd recommend Google Apps as Kamal mentioned for your own hosted email or Sendgrid if you are sending a lot of mails out from your app.

Is there some restriction on number of sending email, if we set up our own email server ?

@hypertextsol: No, there aren't any restrictions by default.

Hi, I have seen many replies to this question say 'use Google Apps'. But how do we do this? Just a point in the right direction woulod help us. Where/ how do we go about setting this up?

I want to give a little more info so hopefully I get a more specific answer. I have setup my website and configured the DNS by changing the name-servers from where I registered the domain (1and1) to DO's name-servers. Bing, the site is up, I'm happy. But then I start getting email bouncing, so I'm assuming the change of DNS last night has caused this.
I want to know what I have to do now to get my email working. DO don't do email hosting, so I am electing to use Google's servers (Ed Snowden is kinda making me think twice, but since it's not going to be anything remotely interesting to the NSA or GCHGQ I think I'm good...). How, what 'n' where. As in:- How do I set it up, What (internal)configuration do I have to do on my droplet, Where in my (external)gmail accounts do I link it all together?
Or am I coming at this totally ineptly(not for the first time)?

@amp3rsand: To use google mail, you do not need to edit any configuration on your droplet. Simply add Gmail's MX records to your domain.



(ADD GMAIL MX RECORDS)

Does it cost money to use google apps to set up your email via Digital Ocean? And can you use your own domain that is for instance hosted at Godaddy?

@Timona: There's no charge on the DigitalOcean end, but Google Apps is a paid service. They let you setup your own domain.