I noticed their service when building Server Check.in, but didn't create an account for testing, so can't say anything with 100% certainty. However...
- SMS is not free (unless they're using email-to-SMS gateways), so I'm not sure how they're supporting that, unless they have alternative revenue streams.
- Database bandwidth/storage for more than a few servers costs money—I've calculated at least a few MB/month/server, meaning the data storage and access is a real cost I have to find money for.
Finally, they mention on their about page that they won't do paid until at least Feb. 2013, so I don't know if they'll still be free after that anyways :-/
(This is not to say I don't think their service is bad or anything—I think it looks like a worthy alternative... it's just not what I wanted to use, otherwise, I wouldn't have built Server Check.in.)
You are correct, they are using email-to-SMS gateways.
I do have to limit the SMS messages to 50/month (600/year) maximum at this point (see: https://servercheck.in/sms), until I can better track people's usage patterns and make sure I don't get hammered with larger fees than I'm taking in. That limit will hopefully be lifted at some point.
Thanks in advance.