The true cost of email hosting: what a mailbox price buys

Email hosting is priced per mailbox because mailboxes are easy to count, not because that is what costs money. The real costs are storage, routing, filtering, deliverability, support and margin — and exactly one of those grows on its own while you sleep. That mismatch is why a five-person company with a decade of correspondence and a fifty-person company that deletes everything can end up paying wildly disproportionate bills for the same service.

What are you actually paying for in a mailbox price?

Six things, only two of which behave the way the pricing model implies.

Storage holds the archive, and it is the only line that grows without anyone doing anything. Routing is the MX edge, the outbound queues, the retries, TLS, and the machinery that gets a message from one company to another. Filtering reads every message for spam, phishing and malware. Deliverability is the invisible one: IP warm-up, blocklist monitoring, DMARC reporting, abuse handling, and the negotiation with large receivers that decides whether your mail arrives at all. Then support, which does scale with the number of humans, and margin, which is not a criticism — a mail host with no margin is a mail host that shuts down and takes your archive with it.

Routing, filtering and deliverability are close to fixed per domain. Adding a mailbox to an existing domain costs a provider almost nothing until that mailbox starts storing things.

How much should email hosting cost?

Per-seat business email lists in the low-to-high single digits of dollars per user per month, before the suite tiers that bundle documents, video calls and admin tooling. Those tiers are not email prices, and comparing them to an email price is a category error.

Storage-based hosting prices the thing that actually accumulates. Nisdos Mail is $2 per 25 GB per month — unlimited domains, unlimited users, unlimited aliases included — which works out to $0.08 per gigabyte per month. EU-resident storage adds $1 per 25 GB, so $0.12 per gigabyte per month. Yearly billing is the same rate with one invoice instead of twelve.

Why does per-mailbox pricing break as your archive grows?

Because a per-mailbox plan bundles a storage allowance per seat, and archives only move in one direction. In my own accounts, a working mailbox with attachments puts on a few gigabytes a year, and none of it ever gets smaller. Cross the allowance and you have three options: delete mail you were keeping for a reason, buy the next tier for every seat including the six people who use 200 MB each, or bolt on paid storage at whatever the add-on costs.

The pathology is buying seats to get storage. A three-person consultancy with twelve years of client correspondence is not a small customer by storage and is a tiny customer by headcount, and per-seat pricing gets that exactly backwards in both directions.

What does the split model cost?

Two lines instead of one: a fee for the service that routes, filters and encrypts, and a storage bill you own.

With hosted storage, we quote both as one number: $2 per 25 GB per month, storage included, from 25 GB up to 1 TB. Each 25 GB you buy also lifts the outbound sending limit by 50 messages per hour, which matters more than people expect — free and low tiers throttle sending on purpose, because that is how a platform stays off blocklists.

With your own bucket, the bytes and the bill both stay yours: you pay your object-storage provider directly for what they store. Commodity object storage lists at roughly half a cent to two and a half cents per gigabyte-month depending on provider and tier, which is where the arithmetic turns decisively in favour of custody at large archive sizes. Read the per-request and egress lines before you celebrate, though. A mail archive is millions of small objects, and request pricing hurts workloads like that far more than the per-gigabyte headline suggests.

What does a real comparison look like?

Four archetypes, our published prices, and a generic per-seat rate because published competitor prices change monthly.

Archetype	Typical per-seat plan	Nisdos Mail, hosted volume	Cheaper on paper
5 people, 40 GB of mail in total	5 seats × a single-digit per-seat rate	50 GB — $4/month	Storage-based, by a wide margin
12 people, 150 GB	12 seats × the same rate	150 GB — $12/month	Storage-based
2 people, 400 GB archive	2 seats, plus storage add-ons once the allowance runs out	400 GB — $32/month, or $48 EU-resident	Per-seat, until the allowance breaks
1 person, 1 TB archive	1 seat, plus heavy storage add-ons	1 TB — $80/month hosted, or your own bucket at commodity rates	Your own bucket

Two honest caveats about that table. Per-seat suite plans usually include documents, calendars, video calls and an admin console; if your team uses those, the per-seat bill is not an email bill and the comparison is measuring different products. And row three is the row I would point at if I were arguing against us: few people with a large archive is the shape where per-seat pricing wins on price, and the reason to choose custody there is custody, not cost.

What are the hidden costs on both sides?

Ours is your time. Somebody has to create the bucket, scope the credentials, choose the region, rotate keys when they leak, and test a restore before they need one. That is maybe two hours at setup and twenty minutes a year afterwards for a technical person, and it is infinite for a team that has nobody like that. Two invoices instead of one also has a real, if small, administrative cost.

Theirs is exit friction. Email hosting rarely charges export fees, so lock-in shows up as time: syncing a 400 GB archive over IMAP is days of wall-clock with someone watching for failures, and the per-seat floor means you cannot move one department without a project plan. Storage tiers that only exist inside a more expensive suite are the other quiet cost — you upgrade twelve people to solve one person’s mailbox.

When is per-seat pricing the right answer?

When you have few people and a large archive that fits inside the included allowance, when you need the suite around the mailbox, when procurement wants one vendor and one invoice, or when nobody on the team wants to own a set of storage credentials. Those are good reasons and they are common.

The case for the split model is narrower and sharper: your bill tracks bytes instead of headcount, the bytes sit in an account you control, and leaving is a DNS change rather than a data extraction.