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
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.
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.
If they drop the phone number requirements, you will get spam, a lot of spam. Much more than now.
Make phone numbers optional and add a setting to allow/forbid accounts with no phone number to message you. I bet phone numbers have zero effect on the level of spam.
Phone numbers will still be required to sign up, you only won’t need it to add a contact.
Seriously? Boo :(
Probably helps cut down on spam and bot accounts
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.
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?
because people might feel uncomfortable sending unnecessary personal information to another party, especially if it does not change often, like the telephone number?
I’m mostly contacting people I already know so using phone number (something I already have a collection of) is very handy to me
My kids don’t have a phone number and I would be glad we could use Signal.
should be optional.
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.
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Tech pay in the US.
Not wholly relevant to the above story, but worth calling out regardless.
Fair enough
Doesn’t that just mean both the CEO and you are overpaid?
In some fantasy land where middle and upper management don’t do anything.
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.
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?
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.
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
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.
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.
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.
You can also do micropayments without crypto.
I’m guessing it has to do with money laundering/tracking etc.
Does put into perspective how much it costs to run at this level and how their competitors are paying costs of similar magnitudes
The blog/article calls it out out well: other tech companies are running at much greater magnitudes.
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.
$19M? With 50 employees, that’s an average salary of $380k/yr if my poor math skills are correct. Is that for real?
That’s not terribly awful actually.
If they are wanting to attract programers with experience and not have them sniped.
Fresh out of school in that field with no experience, one can hit $75k-$120k fairly easily.
Signal needs people who are familiar with encryption and cyber security, and are basically inventing new ways to did things in order to mantain user privacy. That is a very specific niche that takes a lot of skill and experience to do.
Where are new grads making >75k (USD)? I made 50k CAD out of school, got a couple raises and now at 65…
Different countries, vastly different pay scales.
Damn you are me from the past, except I don’t have a degree. The pay is much worse up here. I’ve considered trying to get work down south to make some $ but the US is kind of a shit show right now and I don’t want to live in a car dependent city.
Made 75k out of a 12 week coding bootcamp. Didn’t go to school, but worked as a mechanic for about five years before that.
US.
Average starting salary at my school is $68k, my department is $74k average, and I have friends who have started at $110k and had their MS degree paid for on top of that, with a pay bump after their degree.
I turned down $80k starting in a really low CoL area cause they didnt have a big enough moving allowance, and I have a few other options I’m pursuing that are more appealing to me.
Oops, it’s 7.5 percent more. Anyway. Article summary says 40M is total operation cost including 19M in wages.
You aren’t accounting for overhead (taxes that aren’t listed on an employee paystub, insurance, benefits, training, etc.)
The advertised salaries are closer to a 150-200k average which is pretty ordinary.
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.
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.
As much as I would hate a “premium tier” for signal. That sounds like the best approach. Charge $5 a year for features that make sense if you are a signal power user, though that can get dicey fast on what those premium features are
Basically the gamification and moneyfication that for example discord uses which are basically gimmicks for dumb things like animated avatars or special stickers and we clearly know there are a bunch of people that actually fall for it and give money to feel superior for having those things.
Sort of, though I’d be hesitant to say “actually fall for it” in the case of Signal considering it’s a non profit. They’ve worked really hard to solidify chat privacy, and this is more like “if you use signal a lot, and want some features that in no way impact the service but might be something you’re interested in, perhaps you’d donate?”
It’s either that or beg for donations with banners Wikipedia style. They’ve laid out their costs here pretty well. It’s expensive. I mean even your point of “feeling superior,” many who champion privacy are asking people to switch to signal to chat with them because they won’t use other non-secure chat apps, so I see nothing wrong with a “donor” indicator that can be added to their profile or something.
Or have something similar to Cosmetics or better bandwidth (like tgram does)
Im not sure I can afford that
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.
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.
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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.
