Google raises G Suite prices: Basic to $6 a month per user, business to $12 a month

The G Suite price increases are the first in a decade. Google argues that the price increases reflect more value. G Suite Enterprise prices unchanged.

Google raises G Suite Basic, Business prices: Here's what it means ZDNet's Larry Dignan outlines G Suite's price increases, how it'll compare to Microsoft Office 365 and what it means for cloud and technology inflation.

Google is raising prices for its G Suite Basic and G Suite Business productivity suites for the first time ever.

G Suite, which competes directly with Microsoft's Office 365, is raising its prices for the first time. G Suite Basic will raise prices from $5 per user per month to $6. G Suite Business will go from $10 per user per month to $12. According to Google, G Suite Enterprise, which runs $25 per user a month, isn't impacted by the price increase.

Competitively, the pricing moves are in line with Office 365, but mind the details when it comes to features. Microsoft's Office 365 Business Essentials is $5 per user a month with annual commitment with Office 365 Business at $8.25 a month and Office 365 Business Premium at $12.50 a month with same terms. Those plans are small business oriented.

The Microsoft plans differ on apps offered as well as storage.

Meanwhile, Office 365 Enterprise E3 and E5 are $20 per user a month to $35, respectively. Microsoft has raised prices on standalone Office to prod customers to move to the cloud. Microsoft is also focusing on offering Office 365 with mobility and security under a plan called Microsoft 365

Overall, G Suite pricing is a bit easier to follow. The G Suite price increases are global and go into effect April 2. Google argues that it has tripled the value delivered in G Suite via artificial intelligence, meeting tools and other features and apps.

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A few things to note:

  • Customers on an annual contract will get new pricing when G Suite renews.
  • The prices apply globally with local market adjustments for certain regions.
  • Current contracts will be honored.
  • Customers that license G Suite through a reseller will hear directly from those Google partners.

For illustration purposes, a small business with 5 users of G Suite will see annual costs go from $300 to $360. A business with 100 users on G Suite will see annual costs go from $12,000 to  $14,400.

There are four million businesses on G Suite.

In isolation, G Suite's price-to-value argument makes sense. However, technology prices are creeping higher due to everything from storage prices to components to trade wars. For a business, it adds up. Google's G Suite move may also indicate that cloud providers have pricing power in certain areas.

For Google, the G Suite price increases could materially add up. G Suite is estimated to be half of Google's cloud revenue. 

Here are some primers to factor in the G Suite increases and options versus Office 365.

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