Source: Ars Technica
While Google made headlines with their recent “AI for Google Workspace” announcement, they also quietly launched a 20% price increase for their most common business plans. The new pricing went live on March 14, with existing users seeing the increase at some point in the future, starting in April. Google also introduced an annual billing option for businesses, locking in the old rates for a year.
Confusion around Google’s new Workspace branding is understandable, as it applies to both the paid business accounts and free consumer accounts. Free consumer accounts for Gmail and Docs remain free, but the three most common business editions – Business Starter, Standard, and Plus – have all increased in price.
Annual plans have been available before for businesses, but now any business admin can sign up for an annual plan online. The terms state that users are locked into the number of users they pick at the beginning of the year and can add new users but can’t drop them. Billing is still monthly, and added users are prorated.
Google’s three main business plans have all increased by 20%: Business Starter goes from $6 to $7.20 per user per month, Business Standard goes from $12 to $14.40, and Business Plus goes from $18 to $21.60.
Source: Clean drive for Google Drive
Existing users will see the price increase starting in April, with the rollout happening through 2024, depending on the number of user licenses, current contract terms, and payment plan. Customers will receive notification via the Google Workspace Admin Console at least 30 days before their price changes take effect.
Google’s price increase is not surprising, given that their Google Cloud division, of which Workspace is a part, is still not profitable. Higher prices for their most popular product will help with this. The cost of running generative AI features, which Google recently announced, will also represent a significant server cost increase.
Despite the price increase, committing to a yearly plan can save money and be a good investment for businesses.