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I have been running a webapp on webfaction shared plan and using webfaction smtp server fine.

But I am migrating to linode vps and when I try to send emails using webfaction configuration (my webfaction account is still active) I get the following error.

SMTP AUTH extension not supported by server.

Is this a problem from my new server config? or is a restriction from webfaction?

Having in mind that my app sends about 80 emails daily, what would you recommend for smtp?

Should I rent a service?, set up a smtp server?, use a free server like google apps?

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80 mails a day is nothing use whatever you feel most comfortable configuring, for me that would be Qmail. I would not rent a service there is simply no need to pay for such a low volume of mail. The only issue you could face is if your ip was blacklisted for sending spam, make sure your webapp can't be exploited.

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