Google on Tuesday outlined a flexible billing plan for small businesses and put a user cap on its free service.
In a blog post, Google said it will launch what it is calling a flexible payment plan—$5 a month per user. Today, Google charges $50 a year per user with an annual contract. The $5 a month plan doesn’t have a contract and businesses can add and subtract users as needed.
The company also said it will charge customers at the end of the month for both the flexible and annual plans—today it charges at the beginning of the month.
These changes, however, are coming with a user cap. Businesses—excluding schools and non-profits—that have more than 10 users will have to use Google Apps for Business, its pay service. The business account has a service level agreement and higher storage limits.
Google said: “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.”
This cap applies to new customers. Existing customers can go beyond 10 users to 50 with no additional charge. It’s unclear how many small businesses the cap will impact going forward. Anecdotally, I know more than a few small businesses that run on free Google email, calendar and docs, but they will be grandfathered into the new plan.
What’s unclear is how Google will police its 10 user cap on businesses.
For comparison, Mary Jo Foley recently recapped Microsoft’s SMB plan, known as Plan P, which is $72 a year and doesn’t appear to have any freebies in terms of user limits.
