Behind Google’s G-Suite Price Hike



G-Suite prices are rising 20%

Alphabet’s (GOOGL) Google is raising the prices of its G-Suite products by 20%, marking the first time ever the company is pursuing a price hike for its package of productivity apps, which compete with Microsoft’s (MSFT) Office products.

The price hike specifically affects the G-Suite basic and business plans—Google is keeping the price of the enterprise version of G-Suite unchanged. The changes will take effect in April and will see the G-Suite basic package rise to $6 per user per month from the current $5. Similarly, the price for the G-Suite business package will rise to $12 per user per month from the current $10.

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Why Google raised G-Suite prices

Google gave various reasons, including the addition of new services and the tightening of product security, for raising G-Suite prices. According to Google, the only thing about G-Suite that hadn’t changed in more than a decade was its price.

Google closed 2017 with more than 4.0 million paying G-Suite customers, suggesting that the number may be higher by now. Google’s parent, Alphabet, is scheduled to hold a conference call to discuss its fourth-quarter earnings results on February 4, at which time there may be updates on G-Suite’s customer base.

Cloud vendors’ market share

G-Suite is a component of Google’s cloud computing business. According to Synergy Research estimates, Google held ~6.0% of the global cloud market at the end of September, putting it ahead of Alibaba (BABA) with its ~5.0% share. However, it lags behind Amazon (AMZN), Microsoft, and IBM (IBM), which have market shares of ~34%, 14%, and 7.5%, respectively.


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