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submitted 1 year ago by tree@lemmy.zip to c/technology@lemmy.world

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

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[-] pmarcilus@discuss.tchncs.de 227 points 1 year ago

I'm glad that Signal choose to be transparent about its spending instead of hiding it from obscurity.

[-] onlinepersona@programming.dev 26 points 1 year ago

Hiding from obscurity? 🤔

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[-] Chobbes@lemmy.world 176 points 1 year ago

There’s something kind of funny about one of the largest expenses being SMS and voice calls to verify phone numbers when one of the largest complaints about signal is the phone number requirement. I wonder how much this cost factors into them considering dropping the phone number requirement.

[-] topinambour_rex@lemmy.world 111 points 1 year ago

If they drop the phone number requirements, you will get spam, a lot of spam. Much more than now.

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[-] Poutinetown@lemmy.ca 25 points 1 year ago

Phone numbers will still be required to sign up, you only won't need it to add a contact.

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[-] sndrtj@feddit.nl 22 points 1 year ago

Interestingly this phone number complaint only shows up among techies and especially Americans. You guys don't get to keep your phone number? I've had the same number now for 20 years here in Europe, it may as well be synonymous with my identity.

In fact, I'd say the phone number requirement, or at least option, actually promotes adoption in parts of the world. I wouldn't have been able to get my mother to use Signal if it didn't work with a phone number, for instance. She's not gonna make an account just for a chat app. Phone number she already has.

[-] devfuuu@lemmy.world 40 points 1 year ago

Exactly because I have the same phone number for almost 30 years, that is the problem. It's too deep interlaced with my real and personal identity and I regard it as a very private thing that only few people should have.

I don't get the idea that a phone number should just be randomly given as if it was natural.

It's good to have it as an option for example so my mother can use it simply and quickly, but when I go to a conference and want to connect to new people which are still strangers and will and don't give my phone number. So in those situations I have to randomly use other chat system or share emails? When signal already is in my pocket and my main chat application 99% of the time and is perfect for 1 to 1 friendly chats?

[-] shortwavesurfer@monero.town 27 points 1 year ago

It's actually a privacy issue because your phone number is tied to your physical identity so deeply that giving it out is giving too much away.

[-] neonred@lemmy.world 24 points 1 year ago

because people might feel uncomfortable sending unnecessary personal information to another party, especially if it does not change often, like the telephone number?

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[-] interceder270@lemmy.world 90 points 1 year ago

No joke, I'd be way more willing to pay for stuff if business were open about their expenses.

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[-] RealM@kbin.social 78 points 1 year ago

You know what, that's fair.

I saw a lot of discussion in the comments about their workers pay, but honestly, they make a great product. Wouldn't wanna be counting pennies in someone elses pockets. I donated a one time 25 bucks, I hope they will continue to ask for donations whenever they are in dire need of server running money.

[-] xenoclast@lemmy.world 56 points 1 year ago

Of all the services asking me for a monthly fee. $5 for a non-profit private communication tool is a no brainer.

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[-] suckmyspez@lemmy.world 51 points 1 year ago

I find it amusing they don’t accept donations via their own cryptocurrency 🫠

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[-] Blackmist@feddit.uk 47 points 1 year ago

Just over a dollar a user doesn't sound that bad.

I suspect if they run short of money to run it, they'd add some Discord style features. Better quality voice and video sounds like an easy one to get users of it to pony up for.

Although again, I'd prefer a federated alternative. We shouldn't be hanging large portions of infrastructure on a handful of companies that at any point can pull the rug.

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[-] Fallstar@mander.xyz 43 points 1 year ago

Does put into perspective how much it costs to run at this level and how their competitors are paying costs of similar magnitudes

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[-] uis@lemmy.world 34 points 1 year ago* (last edited 1 year ago)

40% of costs is salary? That's so little for software company.

EDIT: oops, it's not 19/50, it's 19/40. 47.5% Still less than half.

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[-] phoneymouse@lemmy.world 29 points 1 year ago* (last edited 1 year ago)

WhatsApp’s initial monetization model was pretty good. Free for the first year, $1/year after that. With 400 million users, that’s a lot of money.

Signal has 50 million, but could cover their costs for $5/year per user, I’m sure, assuming not all users would pay.

[-] lemmyvore@feddit.nl 26 points 1 year ago* (last edited 1 year ago)

If the dollar fee of Whatsapp teaches us anything is that any tax you put on your app hinders adoption.

Whatsapp intended to do that but ended up scrapping the tax for various reasons. One of them was to keep the existing user base (they have existing customers lifetime use for free when they brought out the $1 idea). Another was the fact that in some populous regions of the world credit cards weren't common (like India) and they'd rather have lots of users there.

Bottom line, the $1 Whatsapp is even more elusive than the WinRar license and I've never personally heard of anybody who ever paid it.

https://venturebeat.com/mobile/whatsapp-subscription/

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[-] kalistia@sh.itjust.works 23 points 1 year ago* (last edited 1 year ago)

My non-pro question is : if it was a peer-to-peer service like element, using a decentralized protocol like matrix, wouldn't it be a huge cost saver because of less data bandwidth and server costs?

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[-] Agent641@lemmy.world 22 points 1 year ago

Im not sure I can afford that

[-] Netrunner@programming.dev 17 points 1 year ago

We need a lemmy version of signal

[-] steltek@lemm.ee 57 points 1 year ago

That's Matrix. End to end encrypted, decentralized, and open source.

Bridging opens it up to other services as well, like how Pidgin/Adium/Gaim used to work.

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[-] subignition@kbin.social 16 points 1 year ago

Now I want to know more about that $6 million annually spent on SMS messages... That seems like a ridiculously unnecessary cost, wonder if some startup can wedge into the market and undercut the competition.

[-] redcalcium@lemmy.institute 25 points 1 year ago

Signal use phone number for account identification. SMS is essential to verify that the phone number you used on your signal account is belong to you. This could be the real motivation for signal's recent attempt to start allowing their users to contact other users using their username instead of phone number.

[-] bobs_monkey@lemm.ee 17 points 1 year ago

It wouldn't surprise me if they keep the SMS verification to keep the number of superfluous accounts to a minimum, which would likely greatly exceed the $6m operating costs. I also wonder if that $6m included their now defunct SMS integration, and if that cost has changed at all.

It's also worth noting that while SMS is typically nowadays a free feature, it wasn't always as such. It used to be that users were charged per message, especially in Europe, which is why Europeans tend to rely on messaging services instead of SMS; US carriers made SMS free only maybe 10-15 years ago, and that was only to US based numbers. When you're dealing with many people that are international, such as in the EU, that adds up quickly. SMS is a Telco utility, and they tend to be, er, behind the times as it were. Remember that when you're an internet-based service and you want to interface with a Telco utility, ie via SMS, they charge a tarrif, like a toll road. While Telco utilities are all digital and voip-equivalent based these days, they are still a private network and charge fees to access. And I am now rambling so I'll stop here.

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this post was submitted on 17 Nov 2023
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