We’ve finished the email configuration, and the client now only needs to spend 600 PHP/year (11 USD) for domain renewal—otherwise, their custom domain emails are free each year. There’s no need to spend 4,000 PHP/year per user on Google Workspace, Microsoft Office, or even the cheaper 720 PHP/user/year GoDaddy email plans. This approach is incredibly cost-efficient for small companies.

It’s important to note that Google and Microsoft offer higher-tier plans that can reach up to 16,000 PHP/year per user, and with the implementation of Republic Act No. 12023 (Digital Services Act), a 12% VAT will be added to these costs.

While this self-hosted solution is manpower-intensive, it’s perfect for small companies with fewer than 10 users. Since our main focus is on MSMEs (Micro, Small, and Medium Enterprises), this approach works well for them. However, as the number of users increases, so does the value of the data and the need for more robust infrastructure.

For example, let’s say you have 50 users. First, divide the number of users by 20. In this case, 50 ÷ 20 = 2.5. Now, calculate the logarithm base 2 of this quotient. log2​(2.5) is approximately 1.32. Add 1 to this value, and then multiply the result by 20,000 PHP. This gives you the estimated hardware cost required to support an email system at this scale.

As the user base grows, not only does the organization expand, but the importance of organizing and coordinating effectively also increases. While the required processing power scales linearly with the number of users, the amount of data generated and the infrastructure to back it up grows exponentially. Following the 3-2-1 backup rule (3 copies of data, 2 different storage mediums, 1 offsite copy), the infrastructure must be robust, and eventually, even servers need redundancy for greater reliability and stability.

These estimates account only for hardware costs. Depending on the organization’s needs, hardware upgrades may be necessary every 3 years, or sometimes every 5 to 7 years. Running these systems at scale could consume around 1KW of power, leading to operational costs. However, despite these expenses, self-hosting remains the more affordable option in the long term.

This calculation is based on our experience managing a 400+ user Nextcloud and Mailcow setup. Our goal is to provide MSMEs with a solution that balances performance and cost, offering the smallest, yet most efficient system that meets their specific requirements.