Re:Ask HN: Low-maintenance alternatives to Gmail?
by danpalmer on Tuesday July 03, 2018 @07:01AM
(#17449145)
The price seems reasonable to me. Bear in mind that they are much smaller than any popular free email provider because they charge.
Of the $50, my guess is that $15-20 covers the costs of hosting and support. That's a margin of 70% – could even be closer to 85% which wouldn't be uncommon for SaaS.
However, there are large fixed costs: an office, a development team, etc. Taking these into account, and the fact that Fastmail is a small business - they are never going to have the hyper growth of an ad-supported free model – I'd say this is a profitable, healthy business, charging reasonable amounts.
Could someone do hosted email for $40 for the same thing? Almost certainly. Could they charge $10 for something far less good (reliable, feature complete, less space, worse support, etc) yes – this is what hosting providers like GoDaddy do. Could someone do $10 for the same featureset, profitably? Almost certainly not.
Of the $50, my guess is that $15-20 covers the costs of hosting and support. That's a margin of 70% – could even be closer to 85% which wouldn't be uncommon for SaaS.
However, there are large fixed costs: an office, a development team, etc. Taking these into account, and the fact that Fastmail is a small business - they are never going to have the hyper growth of an ad-supported free model – I'd say this is a profitable, healthy business, charging reasonable amounts.
Could someone do hosted email for $40 for the same thing? Almost certainly. Could they charge $10 for something far less good (reliable, feature complete, less space, worse support, etc) yes – this is what hosting providers like GoDaddy do. Could someone do $10 for the same featureset, profitably? Almost certainly not.