Software costs can really add up for a small business. I run a relatively small business -- mostly online -- and between 3 main services, the software (and hosting) adds up to around $15k US per year, which is not insignificant. And that's with hosting our own email server, which otherwise would cost us another $15k or so per year to go with an established ESP.
Small business, a legal designation in the US, can be surprisingly big: Depending on industry, you can have up to 1,500 employees, or $50mm in revenue, and still be considered a small business by the federal government.
We do a lot of opt-in email for the newsletters we run -- most software (such as MailChimp) that provides the services we need is very expensive, especially if you have more than 100k subscribers. Hence, hosting the email ourselves saves a siginificant amount of money, though at the risk of not being particularly user friendly and also requiring expertise in maintaining the server and email deliverability.
