The $40/year account gives you 10gb of storage. It's comparable with Google Apps, and really $40/year is a totally fair price for something as important as email.
"and really $40/year is a totally fair price for something as important as email."
It isn't about importance, it is about a comparison with its competitors. Drinking water is pretty important, but why pay for $5 worth of bottled water a day when I can pay 5¢ a day for water straight from the tap?
It's about paying for services you use so the businesses that provide those services can have a sustainable business model.
I'm not a crazy person who hates ads in gmail (see http://www.maxmasnick.com/2012/02/12/gmail_paranoia/), but I do believe in paying for things so that the incentives for a company align with what's best for me as a user.
I don't think your first point is relevant to mine. I don't exactly stay up at night worrying if Coca-Cola is making enough money with their Dasani business model. Likewise, as a consumer I don't care about the viability of Google's business model in terms of Gmail.
It is also worth noting that changing the revenue producers from advertisers to consumers doesn't automatically make a business model sustainable. In a vacuum, I have no reason to believe an RSS reader (webmail, instant messenger, or any random service) that I pay for is any more viable than a competitor that serves me advertisements.
Finally, the issue I take with your second point is that a company's motives are going to be dictated by their finances. That may even be a legal requirement if they are publicly owned. Both Fastmail and Google have a financial incentive to keep their user-base happy and growing. One because they are taking cash directly from users and one because they are using users to generate cash. I don't think that slight difference changes their motives as drastically as you might think.
> I don't think your first point is relevant to mine. I don't exactly stay up at night worrying if Coca-Cola is making enough money with their Dasani business model. Likewise, as a consumer I don't care about the viability of Google's business model in terms of Gmail.
This only makes sense if you ignore switching cost. For example, what if it becomes difficult to get your email out of Gmail (e.g. they drop IMAP support or throttle it).
If there is a switching cost, then you do have a vested interest in choosing companies with (a) sustainable business models and (b) business models that align their incentives with users' interests.
Advertising may satisfy (a) but IMO it does not satisfy (b). My reasoning is that if users pay directly for a service, the company is more likely to listen to their comments/needs/suggestions than if advertisers are paying the bills and the users are only there to look at ads (cynically).
I'm sure this doesn't play out this way all the time, but I do think it is generally true. There also may be some selection bias: people running companies who have user-supported services may have different values than people running ad-supported services. Again, definitely not true 100% of the time.
I think the best example of this is Twitter. Because they need ad revenue, they had to change the API and developer rules. Theoretically, this will not happen with App.net because users pay for the service so they don't have to worry about ads.
I think worrying about ad revenue introduces a set of priorities that may be at odds with what's best for users. There are certainly cases where ads work fine (e.g. Google search), but for something like email I prefer to not have to worry about this.
We could certainly operate more cheaply if we didn't have every email replicated to another server (and a third in a second datacentre) as well as backed up daily to yet another machine with a different operating system and different security model.
You're right, doing it properly costs money, and I'm really glad there are enough people willing to pay for good email that FastMail has a viable business model. We've never made stupid-money like the tumblrs or instagrams of the world, but we're growing reliably and at a pace where our infrastructure can be improved gradually.
And we didn't sell for heaps of money either, but then we've been able to keep on operating much the same as before (apart from me getting a 2 year stint in Oslo to do skills and knowledge exchange with related teams inside Opera)
Google apps with a custom domain is 52$ a year, so it's not cheaper.
Btw I don't use fastmail (yet) but after checking my town's tap water analysis, I switched to bottled water. This analogy made me think again about what I'd want as a mail provider.
I can drink a glass of water and forget about it. Water is a commodity. Email is not a commodity.
If you use gmail, that becomes your online identity. It's hard to switch. If you use your own domain, you can switch providers without changing addresses, though not without hassle. But switching away from that gmail.com address? It's more than just giving out a new address -- I'm sure that in 1 year, I'll still be getting email at gmail.
So that's the difference. With email, you need to plan way ahead. With water, you don't.
100 MB email storage, 2 MB file storage
Kinda reminds me of the nineties and not in a good way :-)