Google Apps Follows MS Office 365 With Flexible Billing

Google has revised its Google Apps for Business pricing to make it more attractive to small businesses, offering a $5 (£3) per user, per month plan that follows Microsoft’s announcement of a flexible pricing scheme.

The search engine company also lowered its paid service entry level from shops with 50 users to 10, an effort to make more money from Google Apps in a hyper-competitive cloud collaboration software market.

Microsoft and IBM are Google’s chief competition in the space, with Cisco folding its email offering and startups getting snapped up in recent years.

Apps Not A Big Bottom Line Contributor

Of the $29 billion (£17 bn) Google made last year, only a small fraction of that figure came from Google Apps, whose paid version costs $50 per user, per year.

That annual plan is not going away but customers who sign up online may also now enjoy a $5 per user, per month pricing option, no contract required. This means businesses can add or remove users at will to fit their collaboration computing needs.

Google expects this flexible billing plan will help smaller businesses, whose workforce size and bank accounts may ebb and flow. It should certainly help Google compete with Microsoft’s new Office 365 suite, which is in beta and starts customers off at $6 per user, per month.

Google is also now eliminating upfront payments for new customers, allowing them to pay at the end of the month, regardless of whether they choose the annual or flex plan. Finally on the Google Apps billing news front, Google is also offering direct debit payment options in the UK, the US, Austria, France, Germany, Italy, the Netherlands and Spain.

Google’s reseller partners will be able to offer these billing options to their customers in the coming months.

The addition of flex billing and debit payments and the removal of upfront payments will certainly be a draw for new customers, which is exactly what Google is going for. However, not every change Google is making will be applauded.

Google Apps has more than 30 million users who are enjoying the company’s free Google Apps suite, compared with hundreds of thousands of businesses paying for customer support, more storage and security.

To convert more free businesses to paid Apps customers, new businesses with more than 10 users will need to subscribe to the paid Google Apps for Business service. This change, which does not apply to schools and non-profit organisations, begins May 10.

“This change will allow us to deliver on the expectations of our small business customers and invest in new features that will help them succeed,” Hunter Middleton, a member of the Google Apps product group, said in a blog post on April 26.

Middelton added that existing Google Apps customers can expand up to 50 users at no additional charge, and Google Apps is free to groups with 10 users or fewer.