This will be the first price increase in decades since the original launch of the G Suite. Google has added a slew of new products and functionality that focus on applying machine learning to increase productivity for example, Gmail added Smart Compose to help compete full messages, while Smart Reply in Hangouts Chat works similarly.
As of April 2, G Suite Basic Edition will increase from $5 per user per month to $6 per user per month; the G Suite Business Edition will go from $10 to $12 per user/month. Pricing for G Suite Enterprise Edition ($25 per user/month) will remain unchanged.
The price increase will give Google additional revenue and in ways is more in lined with Microsoft’s offering of Office 365. Microsoft Office 365 pricing structure starts at $5 per month and runs up to $12.50 for annual commitment and $6-$15 for a monthly commitment.
David Thacker, Google’s vice president of product management for G Suite said,
“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”
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). The middle tier features unlimited storage, archiving, “Low-code app development,” smart search, and audit reports geared for larger organizations.
Google has seen the number of G Suite customers swell in recent years. There were 4 million businesses using G Suite as of 2018, up from 3 million 2017 and 2 million in 2015.
Raúl Castañón-Martínez, a senior analyst at 451 Research said,
“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.”
According to Gartner Inc., G Suite had a 9% share of the $17.1 billion enterprise office suite market in 2016; that compared to 90% for Microsoft’s Office 365. 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.