Google is raising prices on subscriptions of its cloud productivity applications to cover added services and features
Google announced a modest price increase of its G Suite Basic and G Suite Business cloud-based productivity suites. The $1 and $2 hike per month, respectively, reflects the added capabilities and features of the packages that compete directly against Microsoft’s Office 365.
The Lowdown: The 20 percent price increase is the first time Google adjusted the cost of G Suite since introducing the paid cloud service in 2008. The pricing changes go into effect on April 2 for customers on flexible billing plans. Customers on annual plans will see the cost increase when their contracts renew.
The Details: G Suite includes applications such as Gmail, Google Drive cloud storage, Google Hangouts for collaboration and meetings, and productivity tools including a
The Impact: The modest price increase is unlikely to adversely impact customers or cause budget concerns. Google’s pricing changes are measured to customers’ spending tolerances. Moreover, as Google says, the addition of applications and expanded functionality more than justify the small price hike.
On paper, G Suite is now priced comparably with Microsoft, which charges $5 per month per user on an annual contract for Office 365 Essentials. However, Office365 Business and Office 365 business Premium cost $8.25 and $12.50 per user per month, respectively.
Background: Google introduced the forerunner of G Suite, Google Docs, in 2006 as a free service. It started bundling the productivity applications with its email service, selling direct and through the channel. For a time, Google was making headway against its chief competitor, Microsoft, at winning high-profile deals — particularly with government accounts worked with partners. However, introduction of Office 365 and the emergence of other cloud-based applications blunted Google’s momentum in cloud productivity applications. Nevertheless G Suite remains pillar in the Google Cloud portfolio.
The Buzz: “[The added features] seems like a fair argument to me, though a 20 percent price increase may be hard to swallow for some small businesses. It’s also worth remembering that G Suite is now big business for Google. There are now more than 4 million businesses on G Suite, after all, and while some of them are surely on enterprise plans with a price point their teams negotiated privately, the vast majority of them are surely on the standard monthly or annual plans,” said Frederic Lardinois of TechCrunch.