Signal’s president reveals the cost of running the privacy-preserving platform—not just to drum up donations, but to call out the for-profit surveillance business models it competes against.
The encrypted messaging and calling app Signal has become a one-of-a-kind phenomenon in the tech world: It has grown from the preferred encrypted messenger for the paranoid privacy elite into a legitimately mainstream service with hundreds of millions of installs worldwide. And it has done this entirely as a nonprofit effort, with no venture capital or monetization model, all while holding its own against the best-funded Silicon Valley competitors in the world, like WhatsApp, Facebook Messenger, Gmail, and iMessage.
Today, Signal is revealing something about what it takes to pull that off—and it’s not cheap. For the first time, the Signal Foundation that runs the app has published a full breakdown of Signal’s operating costs: around $40 million this year, projected to hit $50 million by 2025.
Signal’s president, Meredith Whittaker, says her decision to publish the detailed cost numbers in a blog post for the first time—going well beyond the IRS disclosures legally required of nonprofits—was more than just as a frank appeal for year-end donations. By revealing the price of operating a modern communications service, she says, she wanted to call attention to how competitors pay these same expenses: either by profiting directly from monetizing users’ data or, she argues, by locking users into networks that very often operate with that same corporate surveillance business model.
“By being honest about these costs ourselves, we believe that helps provide a view of the engine of the tech industry, the surveillance business model, that is not always apparent to people,” Whittaker tells WIRED. Running a service like Signal—or WhatsApp or Gmail or Telegram—is, she says, “surprisingly expensive. You may not know that, and there’s a good reason you don’t know that, and it’s because it’s not something that companies who pay those expenses via surveillance want you to know.”
Signal pays $14 million a year in infrastructure costs, for instance, including the price of servers, bandwidth, and storage. It uses about 20 petabytes per year of bandwidth, or 20 million gigabytes, to enable voice and video calling alone, which comes to $1.7 million a year. The biggest chunk of those infrastructure costs, fully $6 million annually, goes to telecom firms to pay for the SMS text messages Signal uses to send registration codes to verify new Signal accounts’ phone numbers. That cost has gone up, Signal says, as telecom firms charge more for those text messages in an effort to offset the shrinking use of SMS in favor of cheaper services like Signal and WhatsApp worldwide.
Another $19 million a year or so out of Signal’s budget pays for its staff. Signal now employs about 50 people, a far larger team than a few years ago. In 2016, Signal had just three full-time employees working in a single room in a coworking space in San Francisco. “People didn’t take vacations,” Whittaker says. “People didn’t get on planes because they didn’t want to be offline if there was an outage or something.” While that skeleton-crew era is over—Whittaker says it wasn’t sustainable for those few overworked staffers—she argues that a team of 50 people is still a tiny number compared to services with similar-sized user bases, which often have thousands of employees.
read more: https://www.wired.com/story/signal-operating-costs/
archive link: https://archive.ph/O5rzD
Are you including the office space/associated costs with employing someone as well? I was once told it costs approx 100k to have me in my seat before the cost of my salary was accounted for, not sure how much BS that was, but 100k was multiples of my salary at the time.
I mean, I could see them trying to say costs for buying land and building shit and furnishing and etc. sure, but again this is YEARLY costs, not startup costs. I do assume there is some of that included in the budget but its not listed anywhere. I mean I GUESS that could be listed under budget for staff but that seems... very disingenuous.
Things like health insurance, etc. are yearly costs though and that stuff does end up adding up. There should also be some recurring taxes that an employer has to pay per employee that aren't part of income tax withholding (i.e. doesn't show up as part of an employee's paystub).
Wages themselves are not the full cost of an employees total payroll expense, since that would also include taxes and benefits. And then you have to figure their expenditure for business equipment (work computer, phone, printer, etc), licenses for job-specific software they use, total cost of the square-footage of office space they need, etc.
You could say office space and furniture and even IT infrastructure are sunk costs but they do need to be constantly maintained and expanded upon as the company grows. Adding a person to the payroll means the company has grown. They may not need a bigger office, or more servers, until they hire a few more people, but then at that point they will need it.