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How Google Is Hoping to Boost Its Fast-Growing ‘Other Revenue’

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Google has increased the prices on some G Suite plans by 20%

Alphabet’s (GOOG) Google announced on Wednesday, January 16, that it will be hiking the price of its G Suite subscription for the first time ever. The search engine giant will be hiking the subscription rates on G Suite Basic and G Suite Business editions from $5 to $6 per user per month and from $10 to $12 per user per month, respectively. The hike will go into effect on April 2 this year.

The G Suite Enterprise plan’s pricing will remain unchanged. The company will also continue offering free accounts to non-business users. The increase comes after the appointment of Thomas Kurien as the head of Google’s cloud division. Kurien was a former Oracle executive.

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Google’s “other revenue” could be critical in the future

Google defended the relatively steep hike by saying that it has added plenty of new services to G Suite including video calls or conferencing with Hangouts Meet, along with messaging with Hangouts Chat.

The company also pointed out that it has increased storage quotas and added advanced artificial intelligence features to its products. The company announced that G Suite has 4 million businesses on it. For the third quarter of 2018, Google reported $4.64 billion in “other revenue,” which includes revenue from Google’s Cloud business (including G Suite), Play Store, and hardware, a 29% increase from the third quarter of 2017.

This segment is touted to be the main growth driver for the company in the future. However, it made up only 13.7% of the company’s total revenue in Q3 2018.

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