Many entrepreuneurs have opted for free (gratis) groupware since 2007. A well known French open source system integrator, which provides to its customers open source software integration including open source groupware integration, uses for its own staff a proprietary Cloud groupware suite, mainly because it was free (gratis) when the company was created. The company has now hundred employee and still uses proprietary Cloud groupware, without paying any monthly fee or system administration cost.
It is quite difficult to estimate a cost for such a solution since the solution is gratis. However, since the solution is sponsored by commercial links, a measure of the cost can be estimated through the number of clicks made by each user every month. Another measure of the cost can be estimated from the use of resources required to provide the Cloud service.
We found that typical users tends to click once a month and that commercial links are priced between 0.1€ and 1€, with a typical price of 0.5€. This gives a low estimate of the "price" of gratis Cloud groupware. If we included the time spent by employee to watch commercial links, this cost would probably be higher.
Another estimation is based on the usage of physical resources and human sources required to produce the service.
The hardware cost of the service depends mostly on the cost of storage rather than on the cost of CPU. With a typical cost of 100 € for 1 terabyte of storage on a hard disk and an average of 7 GB allocated per user, we reach a hardware cost of 0.03€ per month. We took into account in this calculation the fact that storage is duplicated (ie. 14 GB are needed to provided 7 GB of redundant storage). We also took into account the fact that some users use all the 7GB storage while others mostly nothing, with an average usage of 3.5 GB. We consider the cost of CPU or RAM to be close to zero since most users are only connected a small part of the day. Memory is then shared very efficiently by using a kind of multi-tenant architecture.
Intangible costs per user depend on the number of real users, since only those users are likely to provide turnover through commercial links and can be considered as equivalent to users of a traditional approach.
Gratis cloud services usually have many subscribers and much less real users, especially simultaneous users. The number of real users is a figure which is difficult de find and is suprisingly lower than the figures published by marketing departments. For example, one of the largest dating services in the world reaches daily a peak of 30,000 simultaneous connections. The number of "real" users can thus be estimated to be 3 to 10 times this value if we take into account time differences, which gives a figure 100,000 real users. We could imagine that 1% proprierty cloud groupware users also use dating services, which gives a value of 10,000,000 real and active users for cloud groupware (the 1% ratio is a typical low ratio found for all love related commercial services). Another estimate could be based on the number of registered users in facebook, less than one billion, and a 1% ratio to convert registered users into real users. We also reach by this reasoning the same figure of 10,000,000 real users. The 1% ratio is quite typical of Web 2.0 services: people subscribe to them much more than they actually use them. The 1% ratio is probably overestimated since many gratis services rather show a 1 to 1000 rate between real users and subscribed users.
If system administration is handled by a team of 100 engineers, the cost of system administration for 10,000,000 users is equal to 0.1 € per user and per month. If the R&D staff consists of a small team of typically 20 people, R&D costs are equal to 0.02 € per user and per month. The cost of gratis cloud groupware is thus equal to about 0.15 € per user and per month.
We have found through different approaches a montly cost per user of 0.1€ to 0.5€. This cost does not directly translate into a price, since gratis cloud is financed by advertising. However, it provides a target value which any open source cloud solution should match to be competitive in the long term, or which any open source cloud solution should match to be compatible with a business model based on advertising.