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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No joke, I’d be way more willing to pay for stuff if business were open about their expenses.
They do ask for donations in the app from time to time.
So much this. Just subscribed, I hadn’t realized.
I’m glad that Signal choose to be transparent about its spending instead of hiding it from obscurity.
Hiding from obscurity? 🤔
Bot language
ESL. Bots don’t make that kind of mistake.
Of all the services asking me for a monthly fee. $5 for a non-profit private communication tool is a no brainer.
And you’re paying privately… how?
You can donate via crypto on their website
This isn’t viable.
I tried to buy crypto to support some sailors, but… The fees buying that shit are insane. I didn’t want to trade, gamble or by a crypto bro, just exchange some USD to bitcoin, was directed to coinbase as they are reputable, apparently and won’t steal my shit, but their fees are insane. Trading 100 USD was like 19.95 $ in fees. Fuck that shit.
Is there a cheaper / better yet still safe way to get crypto?
Using crypto isn’t for everyone, I just thought they might not know. It’s much easier when you’re ‘in it’.
Bitcoin is generally considered expensive. Bitcoin cash would be the way to go imo, but they accept all sorts that are way less expensive.
Personally I would reccomend p2p methods like bisq and agoradesk. But then you incure exchange fees anyway as you would be more likely buying monero (lower fees and more private), which their ‘partner’ doesn’t accept.
Either way, still cheaper that you described
I agree this is mostly for people already owning crypto.
Note that not all crypto are created equal, bitcoin is probably the one with the highest fees.
The good news is that a lot of developpers accept cryptocurrency donations (often xmr in addition to btc I noticed). So you can help a lot of organisations that don’t want to pay and do legal paperwork to accept fiat.
They have a donation thing and you can setup a monthly donation. It’s gives you a badge in the app.
Yep, this is what I do. Signal’s pretty much one of my top favorite open source applications.
I find it amusing they don’t accept donations via their own cryptocurrency 🫠
Tbf, I’ve used Signal daily for about 5 years now, I completely forgot it had that crypto thing a while back. I don’t think it’s something that the current head of Signal is interested in.
I think Marlinspike’s weird crypto turn is what got him pushed out so we now have the wonderful Meredith the first tech company leader I’ve ever looked up to.
Hopefully they remove that crypto thing from it.
I think it’s sad more like it. One of Cryptos’ actual real world promise was workable micropayments, and that would’ve made a lot of sense as a payment method for a service like this. Like pay either a smallish block sum every month or a tiny amount for every message you send out.
And of course sadder still that Signal has a crypto integrated into it and failed to make it work for anything else but a cryptobro get-rich-quick scheme.
I guess it turned out that nobody wants to implement micropayments because one of their qualities would have to be extremely tiny processing fees which both means that the implementation has to be highly efficient (so it won’t waste the already small margins on computing resources) and the implementing party has to be able to stomach very low profits until traffic gets huge.
I’m guessing it has to do with money laundering/tracking etc.
You can also do micropayments without crypto.
Lol
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.
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.
Someone mentioned above but we have that in Matrix. A great federated messaging service.
We need a lemmy version of signal
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.
There’s application called Session, which is essentially forked Signal, but doesn’t rely on servers or phone numbers. Instead it uses Tor network and is decentralized. It’s kind of annoying though considering adding people to your contact list, you have to scan their id. Increased security but it goes to show why Signal opted for phone numbers.
Instead it uses Tor network […]
Are you sure? Do they use that alongside the weird blockchain backend they had going, or switch over at some point? I remember looking into Session awhile ago but I wrote it off because of the blockchain/cryptocurrency shenanigans involved in the architecture.
As I recall part of the idea was that the cryptocurrency would serve as a sort of incentive for people to run nodes for the Session network to operate.
I am not sure to be honest. It’s something I’ve read, installed application and tinkered a bit. Decided no one from my friends will use this since I already inconvenienced them into Signal. Then promptly removed it.
Matrix is the closest, as it is a protocol to build compatible servers and apps onto it.
No, we need a lemmy version of chaturbate.
I mean, there is already matrix. But does there is already a cammodelling federated tools ?
No, so stop reinventing the wheel, and let’s make something new and original.
19M a year for 50 people ? that would be 380.000/person. Surely there’s an error here somewhere lol Unless we’re talking rupees
Good. People creating useful non-profit services should be paid a lot. And according to their financial reports (somebody linked in another comment) it’s not biased towards executive pay.
As long as it doesn’t end up eventually bringing down the entire service.
It’s not exclusively peer to peer, so there must be infrastructure, no?
nah they say 19m is for their almost 50 employees. 14m is infrastructure, 6m of which is for texts to confirm, apparently. Which also… seems like way too much? 6 million for text messages? Are they confirming 390 million new accounts a year? Quick google says its .79 cents a text. 2x that to receive also and… yeah… I’m pretty sure that ain’t right. Like I get the 8 mil a year for data, cuz yeah it is a lot. Texts should probably be 1m assuming 50mil new accounts a year. I could see 10m for the 50 people, that is $200,000 on average. So… half what they claim seems reasonable.
Probably for renting office space, security, catering, training, employee benefits, and things like that. I’d imagine costs like that balloon up quickly.
Plus there’s likely background checks for potential hires, onboarding and interviewing, these all have costs too since they have to be selective of who they hire, since that person will then be working on one of the most secure messaging platforms in the world.
Also, as for the costs of texts, a significant part of that would be the costs associated with sending push notifications. I remember a while back, when I had an iphone and used Apollo for Reddit, the developer of the app explored every option but eventually settled on a paid subscription system, just to enable push notifications for the app. There was no other way since for the users of Apollo alone, the cost of sending push notifications every time you got a reply or message was surprisingly high.
That was just on iOS, add Android to that plus Signal’s clients on other platforms, I’d imagine that the bandwidth to send notifications probably costs Signal a lot since people tend to have conversation prompting multiple notifications on their device.
I could be wrong but that would be my guess as to why the costs are, what they are.
Ah the push notifications makes a lot of sense, the article said that was just for SMS messages to confirm messages and that seemed way too much, but push notifications is probably right.
And yeah, I guess I assumed most of those costs wouldn’t be labelled staff budget, but idk I’m not an accountant lol. Still that seems to be a lot for 50 people yearly.
If signal is run by 50 people, I have a pretty good hunch that the majority of them are very well paid developers and engineers, and IT…and a rather small amount of lower-paid administrative staff.
Keep in mind that they need to be able to send SMS worldwide and roaming is a thing. Especially if you have to deal prices with all the telco in the world
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.
If all the employees are located in the highest cost of living area in the world, it kinda makes sense.
Gotta pay those insane housing costs somehow.
Could be that that is employee headcount and not including contractors.
C*Os probably eat a la4ge portion of it. Not even breaching into VPs and Senior Managers
Well there it is, they can make savings easily afaic
Yeah, that seems shady at least, what kind of salaries are they getting?
Where I live in europe, IT people usually hace salaries between 30.000 and 80.000. And it is considered a pretty good salary.
Im not sure I can afford that
The ecosystem is moving? How the turntables
They should make it possible for the community to help out with server resources. Relay or decrentralize it maybe.
There’s probably a lot of pros and cons. But the big thing for Signal would be maintaining privacy and solid performance.
These things become harder to guarantee if you decentralize or rely on the community. While Matrix is doing quite well in this regard, it would take a while before Signal had all the ducks in a row to enable this.
I don’t think Matrix is making this well… We with friends have selfhosted instance and the database bloat is scary.
If Matrix would be as popular as Signal it would blow up untill they fix performance with their server.
They do ask for donations in the app from time to time.
Relay or decrentralize it maybe.
The thing I read about this earlier said Signal is super against decentralization iirc. Or at least against federation? Are they different?
I suppose it could be decentralized without being federated. Every node would just be a part of the single instance, whereas in a federated model they’d be more independent.
A centralized implementation is much simpler than a decentralized one, making it easier to guarantee performance and stability if you don’t do it. That might explain why they don’t want it.
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?
If Matrix was p2p at this point, sure. iirc it’s still very experimental but theyve made a lot of progress over the last 3 years.
No, the cost would be higher. It would just be distributed among a larger group of people, and there wouldn’t be any way to measure it.
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.
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.
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.
I remember once a girl I was friends with lamenting that someone sent her two text messages when it could’ve been one, because each one counted against the free quota before you were charged per text.
Yup, the late 90s to mid 00s we’re an interesting time
And god forbid special characters
Right, the reason why SMS is used was explained in the excerpt, I’m not asking about that. I guess what I’m curious about is how badly the telecom firms they’re purchasing SMS services from are price gouging, and if they are, why there hasn’t been a startup in this space
In my country, all carrier here would block bulk SMS sending (and terminate your phone number if they think you abuse it) unless they come from a special short number account (e.g. those with 4 - 5 digits phone number), and those account is not cheap. That’s where the telcos made money from sms these days now that ordinary people don’t use sms much. They would partner with api providers such as Twillio to setup the account. You can review Twilio international sms pricing for an overview of sms prices across the globe. In my country, it’s 50x more expensive than US.
I have high hopes that the donation % and amount of users will grow after the interoperability implementation
Eventually they’re going to cave into having some paid model. Like all good things we once held dear, the long arm of monetary reliance shows no pity or remorse in it’s wake.
If they do I think they should leave messaging free and create some Premium Signal subscription to get voice calls and video calls.
I don’t want to pay for this major bandwidth usage even though I have never done a single secure phone call.
I cannot understand how they can use so much bandwidth and I have to assume the vast majority of it is for voice and video.
