for 1 user is okay.
if you have alot it will cost like crazy
If you are just looking at the cost of hosting 1x email server, spread across X number of users, then the sole cost of just USD$5/user/month is a lot.
But when you consider the following points, then it may not be really a lot per say
- Cost of your engineers (inclusive of pay increments, training, upgrading)
- Cost of DC hosting + servers + backup + monitoring
- Cost of software (not necessarily everything is open source or free) [remember the experience of the kind of engineers a company employ also have its cost]
- Cost of actual backup, actual OS + apps patching, upgrades
- Cost of redundancies systems
- Cost of spammers eating up your inbound network
We also need to think in terms of beyond just email, google docs, spreadsheet or the norm, for Google Apps.
The business portion of google apps also allows you to manage your mobile devices, generate reports, SSO integration(SAML) and more.
When you consider all these, that USD5/month might be a bargain, since it seems all these are off-loaded from your daily operations and you don't really need to employ these staffs to manage these things.