Talking tech since 2003

If you follow the technology and business news at any degree, I believe that it goes without saying that it’s a rarity (at best) to witness a “trend-setting” company like Google blatantly and openly mimic the actions of a competing company; although I’m sure there are a few iPhone users who got a chuckle at that statement.  But regardless, one cannot deny that Google’s business practices are usually seen as new and often unorthodox in a practice that often-times leaves Google one step in front of their competition.  One great service that Google has been mildly successful with is previously reviewed Google Apps, a service that allows Internet domain owners to quickly and easily set up managed and branded Google services for their organizations.  And while Google was indeed one of the first companies to bring third-party email and cloud hosting into the mainstream, the company has recently been subjected to stiff competition from a surprising source.

You see, Redmond-based Microsoft recently released a public beta of a new small-business targeted collaboration and communication system dubbed “Office 365”.  When looking at the service last week, I quickly came to the conclusion that Microsoft was definitely heading in the right direction with their new service which gives smaller businesses and organizations cost-effective access to the same services (Exchange, Sharepoint) that are typically only seen in larger businesses, leaving Google with a bit of catching up to do.

This is because Office 365 does more than offer the features that organizations of all sizes need, but it also implements a pricing structure that makes it a bit more attractive for users.  At six dollars per user per month, Microsoft’s pricing is more reasonable (and flexible) than one probably would have guessed.

With this development, Google has followed suit by moving Google Apps over to a similar monthly subscription product.  While this isn’t necessarily a big deal, the new pricing terms suggest that Google is shifting focus from catering to large enterprises to working with small and medium-sized businesses, organizations, and groups.  But why?

Well, as great of a service as it is, many people speculate that Google isn’t doing too well with Google Apps at all.  Seeing as how Google is targeting large-scale businesses that often-times have their own in-house systems in place, it doesn’t take a rocket scientist to figure out why Google Apps has yet to gain enough traction to make it a profitable venture.

But while I can appreciate Google’s new target towards small businesses and applaud the fact that they are moving over to a more commonly used monthly system, doing the quick math shows that Google’s five-dollar per month per user plan is really taking advantages of businesses on the monthly term by charging them ten dollars more per user in a given year than they would pay on the annual term.  Now don’t get me wrong; I understand that costs and prices go up.  However I think it’s rather sad that Google is essentially targeting customers for more money whilst not providing any new features or services to justify the price hike.

For Google this business move is pretty silly, as the company has now managed to narrow the price gap between their (now outdated) service and Microsoft’s newer and more robust service.  This ultimately gives businesses less of a reason to use Google Apps, and may very well convince newer customers to use Microsoft’s new product instead.

To boot, Google is now imposing stricter limiting the number of users that a standard (free) Google Apps organization can have.  Effective immediately new domains can only have ten users; down forty from the old limit of fifty.  In retrospect, I opened a free Google Apps account quite some time back, and was given scalability of up to seven-hundred users without any questions; all for free.

Really, I get that Google has to make money.  It just confuses me as to why they’re starting to charge more for a service that they haven’t added any functionality to for quite some time now.  While the old and more cost-effective pricing structure can still be used and Google is quick to point out that the new limits are only applicable to new domains/organizations, I honestly think they’ve managed to make their product less attractive to small businesses; a group that they quite obviously need to target in order to see future success with Google Apps.

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