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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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I’m glad that Signal choose to be transparent about its spending instead of hiding it from obscurity.
Hiding from obscurity? 🤔
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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.
Because there are no other possible verifications apart from phone numbers? Do you open a bank account with your phone number, because it’s the only way?
What would you think would be an appropriate alternative to easily verify chat accounts that’s cheaper than validating phone numbers?
Make addresses-per-contact, not global. Provide no discovery for addresses. Spam solved, since the spammer can’t find your address.
You can of course add public messages with phone numbers verification on top of that, but you absolutely do not need them for a spam-free chat app. Address discovery should be completely optional and addresses should absolutely not tied to phone numbers.
It’s utterly ridiculous that this apps claims to care about security and the first thing it does is collect boatloads of private data.
Let’s not push a definition of “security” that Signal does not claim. The messages are “secure” in that nobody other than you and the other people in on the conversation can decrypt them.
Also, no need to be dramatic. A phone number is not “boat loads of data”.
A phone number is not “boat loads of data”.
I mean, your phone number can be used to find out everything about you.
Also, no need to be dramatic.
Signal is an over hyped piece of shit that grossly violates numerous core tenets of
priceyprivacy and data freedom.
That’s actually a pretty good idea.
I’m guessing you generate a unique address to share with someone, and then they add you. Spam is literally solved and it becomes more private.
Might want to think twice before donating to this company that’s eating up $40m/year with 50 employees.
I’m going to go out on a limb and say that the company that is dominating the privacy-messaging space, considered and discarded this idea for reasons they consider valid.
🤡
Captchas or other challenges, and better spambot detection.
Those are already in place. They don’t suffice.
Video call, email, other verificated factors.
So do you think this is the only option available?
You think a verification via a video call is cheaper than SMS…?
That’s not to mention the potential concerns that would arise around the possibility of signal storing (some portion of) the video…
Nope, just saying phone numbers are far from the only option. And if telcos are price gauging you should look at the alternatives.
No you’ve complained and insinuated there are plenty of other solutions that the world class team at Signal, literally the preminent experts in their field, chose not to use - and then offered to some truly next level terrible options.
Nope, just saying phone numbers are far from the only option.
What would you think would be an appropriate alternative to easily verify chat accounts that’s cheaper than validating phone numbers?
It’s the cheaper portion that’s the issue. There are “other options”, but they’re not cheaper and/or they have their own issues.
I didn’t touch the email case because email addresses can be so rapidly created (even out of thin air via a catch all style inbox) there’s nothing to it.
Video call is expensive, and frankly, if I’m gonna sign up at a private service, I’m not going to make a damn video call.
Email is not enough to go against spam. Email addresses are basically an Infinite Ressource.
Other verified factors are nothing concrete. Sure we could all use security hardware keys, but what’s the chances that my mom has one?
Other verified factors are nothing concrete. Sure we could all use security hardware keys, but what’s the chances that my mom has one?
PKI doesn’t require hardware keys
True, but it’s not exactly User friendly too, right? If not, tell me. I’ll be happy.
So you do think that phone numbers are the only way to verify the person? This is just stupid. There are enough, like IDs or stuff like that. If you don’t want that, that’s a totally different story.
It’s a bad problem no? Combatting “spam” Accounts while balancing privacy.
Personally, I don’t want to give them any more information than is really necessary.
I open a bank account with a copy of my id, a copy of a bill to my adress, and some money. My phone number can be used along the process, like for a digital signature.
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.
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.
My kids don’t have a phone number and I would be glad we could use Signal.
should be optional.
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
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.
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?
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.
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 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
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.
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.
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.
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.
That’s about the price to compete for a software eng these days.
Factor benefit costs too.
And it’s the kind of product you don’t want a 80k developer to introduce security vulnerabilities left and right. You get what you pay for.
Security minded people are usually very skilled, and everyone’s competing to get them.
Could it be run cheaper? Yes probably. Would the product enshittify after a while? Absolutely yes.
More likely average developer salary and CEO takes couple of millions as a bonus every year, as they all do.
This is unfortunately almost definitely how it works.
After all, what kind of CEO can live with only having one yacht?
According to tax filings, they are not paying him a single dollar. Which is something am finding very suspicious. Especially considering he gave the company ~$100M for startup. But if it’s true, then it’s commendable. Person who has $100M in cash to shell out for a startup doesn’t need to worry about the money, it’s just that they often only care about that.
I’m in the wrong field!
I mean, multiple places online saying literally less than half that at the high end. Also, I could see a few making that much I guess but all 50 employees?
Bull. Shit.
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.
That’s assuming even pay distribution, which is obviously not the case anywhere.
Still, I hope the distribution isn’t terribly skewed, the developers absolutely deserve to be fairly compensated.
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.
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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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.
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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.
My dad paid for it for himself, for me and for my mother, this made a lot of sense bc in Spain, in the pre-messaging app era, sms were like 5-20cents each in most tariffs.
It was getting to the point where it wasn’t uncommon for an average joe to just ask their friend who’s using whatsapp how to pay for it so he can have it too(many ppl had never bought anything online so they needed help)
However things are different now, there are tons of free messaging app alternatives out there, ppl would rather change to another free one.
They had 40 million users in 2021, so a dollar a year would cover the costs.
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.
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.
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.
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.
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).
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.
