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Small Business

Google Apps No Longer Free for Small Businesses Signing Up

Google Apps No Longer Free for Small Businesses Signing Up
December 7, 2012 12:06PM

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Analyst Charles King described the Google Apps for Business pricing plan as a natural evolution of the 'first one is free' market-building strategy. He added that there's "been a great acceptance among smaller businesses" for Google Apps, whereas larger ones tend to have issues with compliance, business processes and security.

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If you're a small- to medium-size business, you may have gotten accustomed to using free Google Apps. You can continue to do so, but now the "free" part is ending for any new signups, with Google's announcement that it will henceforth charge for businesses with up to 10 accounts.

The Apps suite includes calendars, word processing, presentation graphics, spreadsheets, online storage and branded e-mail, and the service will now be offered to new business customers for $50 per user per year, or $5 per user if on a monthly basis.

On the company's Official Google Enterprise Blog, Google Apps Director of Product Management Clay Bavor wrote Thursday that Google Apps started in 2006 with the idea of helping "businesses and schools work better together without the hassles of managing software and server."

Businesses 'Outgrow' Basic Version

The next year, the company offered a premium edition for businesses at $50 per account per year, with such added business-oriented features as APIs, conference room schedules in Calendar, 10 GB of inbox storage, extended business hours phone support, and mobile access to e-mail on BlackBerry smartphones.

When the premium version was launched, a basic version was kept free for businesses and individuals. Bavor said that "time has shown" that businesses "quickly outgrow" the basic version and want additions like 24/7 customer support or larger inboxes, while consumers have to wait for new features until they were business-ready. In other words, Bavor said, the same package had trouble matching the needs of both markets.

Over the past 12 months, any business with more than 10 users paid $50/person/year, while before 2011, only those with more than 50 users did. Now businesses of all sizes are charged the $50/user/year or $5/user/month rate for Google Apps for Business, which includes 24/7 phone support, a 25 GB inbox and a guaranteed 99.9 percent uptime. Individuals can still have a free, personal account, and a Google Apps for Government is still available at $50/user/year.

The company said existing small-business users can continue without a charge, and Google Apps for Education is still available as a free service for schools. Google Apps has more than 40 million users and, according to The Wall Street Journal, the suite provides about $1 billion in annual revenue for the technology giant.

'Inevitable'

Laura DiDio, an analyst with Information Technology Intelligence Consulting, said Google's move to charge businesses at the lower end of total users "was inevitable," and added that the $50/user/year amount "wasn't a big pain point" for most companies.

However, she noted that, unless "they offer inducements, they'll lose half the companies right away." DiDio said she expects Google is waiting to see the reception, and, if the drop off rate is acceptable, companies will "probably see some additional rate increase" in the not-too-distant future.

Pund-IT analyst Charles King described the pricing plan as "a natural evolution of what you might call the 'first one is free' market-building strategy." He added that there's "been a great acceptance among smaller businesses" for Google Apps, whereas larger ones tend to have issues with compliance rules, business processes, security and functionality in the suite.

At this point, King said, the main question for SMBs is "what's the alternative," given that Microsoft's Office 365 goes for $4 to $20 per user per month.

Tell Us What You Think
Comment:

Name:

Craig:

Posted: 2012-12-08 @ 9:51pm PT
Next up, Chrome.

Jonathan:

Posted: 2012-12-08 @ 7:20am PT
Yeah, $5/user/month still sounds cheap compared to all the alternatives I've found.

Sean:

Posted: 2012-12-08 @ 5:05am PT
The whole idea of using Google Apps is it's free and it can be accessed from anywhere.
It was never because it is better or easier than Microsoft Office suite installed on a local computer. Indeed, running business productivity applications inside of a web browser is so awkward and limited, not to mention it is slower, and you cannot use it without Internet connection (e.g. on an airplane). Now it is no longer free, SMBs really should look for better alternatives. DriveHQ.com has offered cloud IT service to SMBs since 2003. It is a one-stop shop for all core IT services such as file server, email server, FTP server, static web server, online backup, folder synchronization, group file sharing and collaboration with user access control. It has tons of high-end business features all bundled for the same low prices. Our user license costs only $0.6/user/month, why not give it a try?

Ricky:

Posted: 2012-12-07 @ 4:23pm PT
Google Apps still has a free version. Here is the guide on how to get it. Check it out: http://techwalls.com/news/register-free-google-apps-standard-account-single-user/
I don't think Google will kill it soon.

Adrian:

Posted: 2012-12-07 @ 2:57pm PT
The Microsoft alternative to Google Apps is hosted SharePoint that costs about $8/month for unlimited users through vendors such as Apps4Rent...



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