G-Suite’s price hike
Google (GOOGL) believes it is in a position to give Microsoft (MSFT) a run for its money when it comes to productivity apps. The company is preparing a 20% price hike for its suite of cloud-based productivity apps, G-Suite. According to Google, G-Suite has undergone several updates and upgrades recently to justify the new prices.
Starting next month, Google is set to raise the charge for G-Suite’s enterprise version to $6 from $5, and the charge for the business package to $12 per user from $10. Google has never raised G-Suite prices before.
G-Suite is part of Google’s cloud business
G-Suite is part of Google’s cloud computing business. While the company doesn’t report its cloud revenue as a separate item, revenue in the unit that houses its cloud business grew 30% YoY (year-over-year) to $6.5 billion in the fourth quarter. Meanwhile, cloud revenue at Amazon (AMZN) and Microsoft, the world’s top cloud companies, grew 45% and 76% YoY, respectively. Google held ~7.0% of the global cloud market in the quarter, according to Synergy Research.
Google appears to be betting on products such as G-Suite to diversify its business outside advertising. Google emerged as the most ad-dependent company among the world’s top search engine companies in the December quarter, with advertising sales comprising 83% of Google parent Alphabet’s revenue. In comparison, advertising sales made up 78% and 76% of Baidu’s (BIDU) and Yandex’s (YNDX) revenue, respectively.