The other day, a guy sent us an email inquiring about the cost of a VPN service. Guess he didn’t read it all cause we do share the prices of all services.
In any case, we decided to answer this question in a dedicated article, explaining to everyone why even the best VPN services are so affordable.
The cost of operating a VPN service
With all the benefits a VPN service provides, one would think a good VPN costs a small fortune. Well, we are glad to say, even the best VPNs cost just a few dollars per month when bought with a multi-year plan.
That being said, operating a good — let alone great — VPN service costs a lot. These costs include:
- Servers
- Bandwidth (network capacity)
- Staff, including highly skilled (and expensive) system administrators & developers, marketers, admins, and so on.
- Taxes and other administrative costs
Now let’s make a basic calculus, taking as an example a VPN service provider with 1,000 servers — though the best services have 3,000-5,000 and more servers in their networks. And we’ll turn the price of a server machine cost into a monthly cost, assuming it costs $100 for a server to run.
So the costs table looks like this:
| Item | quantity | cost per month | annual cost / unit | total annual cost |
|---|---|---|---|---|
| Servers | 1000 | $100 | $100,000 | |
| Bandwidth | 1000 | $20 | $20,000 | |
| System administrators | 5 | $100,000 | $500,000 | |
| Developers | 5 | $90,000 | $450,000 | |
| Management | 3 | $150,000 | $450,000 | |
| Other staff | 10 | $60,000 | $600,000 | |
| Other costs | 1 | $100,000 | ||
| Total | $2,220,000 |
That’s $2.2 million per year in our rough estimate. But say we were generous and that the actual price is half that — we’re still talking about $1 million of costs PER YEAR.
I hope that you now see why free VPN services HAVE to sell your data in order to stay in business. Or offer you a lackluster service.
How can VPNs be so affordable?
There are three key things that affect the price of VPN services:
1. Scale
If they have a million or more users, they are still highly profitable businesses. Without such a big user base, they are on the market to lose money. At least until they grow to that level.
2. Automation
Tech-wise, VPN services are highly automated businesses. Adding a thousand new users per day will hardly affect the day-to-day operation. Sure, some added capacity may be required and some servers will have to be upgraded, but that is not something the VPN staff has to do for every customer. Not even for every additional hundred customers.
3. Competition
This is a highly competitive market to the benefit of end users. I’m sure most VPN services would cost more if there were no other competing services around. In fact, that was the case just a few years ago – but these days, the situation is very different.
So, how much does a VPN cost?
For you, as a user, it costs just a few dollars per month if you sign-up for a 2- or 3-year plan. Alternatively, if you want to pay on a month-by-month basis, you’ll have to shell out around $10 every month.
We do advise everyone to sign-up for as long as possible and benefit from the best possible deal. However, you should also sign-up for a service that will get the job done for you, no matter what you throw at it. And for that, we have prepared a list of Best of the Best VPNs, which we advise you to consult before spending your hard-earned cash.
So, hop over to that page, find a VPN that suits your needs and never look back…