Google is set to increase G Suite subscription prices for the first time since the productivity and collaboration software suite was launched; Google said the move follows the addition of a variety of new features in recent years.
As of 2 April, G Suite Basic Edition will increase from US$5 per user per month to US$6 per user per month; the G Suite Business Edition will go from US$10 to US$12 per user/month. Pricing for G Suite Enterprise Edition (US$25 per user/month) will remain unchanged.
G Suite was initially built around core apps such as Google Docs, Calendar and Drive, but has added a range of other tools, including a video-conferencing tool (Hangouts Meet); team messaging (Hangouts Chat); and enterprise search (Cloud Search - only available on Business and Enterprise tiers).
“Over the last 10 years, G Suite has grown to provide more tools, functionality and value to help businesses transform the way they work. The one thing that hasn't changed over this time is price,” said David Thacker, Google’s vice president of product management for G Suite, in a blog post.
“G Suite has evolved significantly in the last two years; Google’s explanation that the price increase reflects the value it provides seems like a fair explanation,” said Raúl Castañón-Martínez, a senior analyst at 451 Research.
Google has seen the number of G Suite customers swell in recent years. There were four million businesses using G Suite as of 2018, up from three million 2017 and two million in 2015.
According to Gartner, G Suite had a nine per cent share of the US$17.1 billion enterprise office suite market in 2016; that compared to 90 per cent for Microsoft’s Office 365.
Office 365 has a more complex pricing structure, with a variety of subscription options. Small business customer subscriptions cost US$5 per user/month for Office 365 Business Essentials, US$8.25 for Business and US$12.50 for Business Premium. For larger enterprises, prices range from US$8 per user/month up to US$35 per user/month.
Although it is difficult to compare the two suites precisely, Google’s G Suite increase brings its pricing closer in line with Microsoft’s subscriptions.
For Google, the G Suite price increases could actually be beneficial as it takes on Microsoft, said Castañón-Martínez. “Keeping its price below Microsoft could result in organisations perceiving it as an inferior alternative, when in fact – in more ways than one – G Suite outperforms Office,” he said.
“While it still lags Microsoft in terms of market penetration, the move reflects how Google is evolving as an enterprise software vendor; in other words, its go-to-market strategy is catching up with its product strategy,” he said.