Google Increases prices on its Rival to Microsoft Office for the First Time in a Decade

Google is increasing the prices for both basic as well as business versions of its exclusive G Suite productivity apps, such as Gmail and Docs, for the very first time. Google reported a 20 percent spike in the price that will be coming into effect soon after the appointment of Thomas Kurian, the new head of Google’s cloud division space.

The announced price bumps, which is from $5 to $6 per month for the Basic Edition plan and from $10 to $12 per month for the Business Edition tier, will be coming into effect on the 2nd of April and will bring the price of Google’s product quite closer to that of rival suite Microsoft Office 365. However, the features of diverse pricing tiers from Microsoft and Google can’t be compared directly.

The basic differences lie in the storage space and several other features between the basic and business tiers of G Suite. The pricing framework for the Enterprise edition of Google’s G Suite will remain the same and Google will persistently continue to provide free accounts for the non-business users.

Google, via a blog post introducing the brand new pricing, says that the G Suite has drastically evolved and successfully grown to offer more products. The only one thing that hasn’t witnessed any change over the time period is price.

While Google doesn’t break out the business earnings or its cloud market share, it quoted in February 2018 the overall cloud unit had surpassed $1 billion in terms of revenue per quarter. In spite of this disclosure, it is tough and unclear to determine the revenue contribution from Google’s Cloud Platform versus G Suite.

The public cloud market share of Google is broadly seen as lagging behind as compared to that of both Microsoft’s and Amazon. In the Q3 earnings of Alphabet, it reported an amount worth $4.64 billion in its category of “other revenues”, which also comprises of its cloud business, revenues from app store, and sales of hardware.

Google conveys that the change in prices would not have a profound impact on the existing renewals or contracts made on or before April 2. It would be interesting to see what other implications, whether positive or negative, this decision will bring in for Google in the foreseeable time.

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