News

Google Starts Charging for Its Business Apps Service

• By Kurt Mackie
• 12/10/2012

Businesses signing up for Google Apps can no longer use it for free, Google announced last week.

Late last week, Google gave notice that its hosted productivity suite for business users will just be available in one Premium edition at a cost of $50 per user per year, starting on Dec. 6. However, those companies currently using the free version of Google Apps can continue to do so, since the restriction just applies to new accounts on or after Dec. 6.

Individual users can continue to use Web apps, which look a lot like Google Apps, via Google's Gmail and Google Drive services at no charge. Use of those Web apps is free even for new users signing up for the first time. Google Apps for Education and Google Apps for Nonprofits (United States only) continue to be available for free. In addition, the company continues to offer a Google Apps for Government offering that costs $50 per user per year.

The notice of the policy change to Google Apps for Business was delivered in a Google blog post that claimed businesses previously had access to two editions, a free basic edition (typically known as the "Standard" edition) and a Premium edition. The free edition supports up to 10 users and serves up ads. Moving to that free edition still remains as a downgrade option for Google Apps for Business users until Jan. 9, 2013, according to a Google FAQ. The Premium edition of Google Apps for Business previously went by another name, namely "Google Apps Premier Edition" (GAPE).

Google likely will need to police its new policy change to keep businesses from using the free service that's available to users with Gmail and Google Drive accounts. A question sent to Google's PR about how such policing would get carried out went unanswered by press time.

Currently, Google offers two services to business users, Google Apps for Business and Google Apps for Business with Vault. The Vault option adds archiving and electronic discovery capabilities to e-mail and messaging, along with the ability to set retention policies and legal holds. If a company signed up for Google Apps for Business before Aug. 1, 2012, they can't get the Vault option. However, Google's description of Vault purchasing indicates that it's working to resolve that restriction.

Users can be added at any time with either plan, giving access to various apps, such as Gmail, Calendar, Docs, Sheets and Drive. Both business plans support an unlimited number of users and include 25-GB mailboxes, custom-domain e-mail addresses, Google Drive storage of 5 GB, document editing, video chat, mobile device management, "24/7 customer support" and "99.9 percent uptime guarantee."

Billing is based on either a "flexible plan," where companies pay for the number of users they had each month ($5 per user per month) or an "annual plan" for a fixed number of accounts billed monthly at a rate of $50 per user per year, according to Google's commonly asked questions.

Google claims that "over five million businesses" are using the Google Apps for Business suite. Its productivity suite represents about $1 billion in sales for the company, with the vast majority of businesses using the free version, according to The Wall Street Journal. The revenue from Google Apps represents just a small fraction of the company's overall revenue, which largely comes from search advertising.

Google Apps partly competes with Microsoft's Office 365 productivity suite offerings, although the Office suite that comes with Office 365 subscriptions are mostly premises-based solutions, rather than cloud-based ones. However, competition with Apple seems to be the motive behind the Google Apps policy change. Apple doesn't offer anything free to businesses and Google was likely reacting to Apple's business model for services, according to the Journal's account, which cites the opinion of a former Google Apps executive.