Google G Suite Price Hike Coming

Google is preparing to implement its first price hike for G Suite since the groundbreaking office productivity suite was introduced as Google Apps more than 12 years ago.

The cloud provider recently informed its reseller partners that on April 2, the cost of G Suite Basic, the introductory tier, and Business, the intermediate tier, will both be elevated by 20 percent for month-to-month subscriptions. The cost of the Enterprise tier will stay fixed.

Google will officially make the announcement Thursday and has scheduled a worldwide conference call with partners on Feb. 5 to answer their questions. The Mountain View, Calif.-based cloud provider didn't comment on this report.

[Related: CRN Exclusive: Accenture Ditches Midsize G Suite Customers, Driving Business To Regional VARs]

G Suite Basic will go from $5 to $6 a month and see a steeper increase from $50 to $72 for a year's commitment. G Suite Business, which offers more enterprise-grade features, will climb from $10 to $12 a month, and a proportional $120 to $144 per year.

The price hike, in many ways, was expected, partners tell CRN. Google has been pouring R&D dollars into the product as it aggressively competes with Microsoft's rival offering, Office 365.

"They've made a lot of product enhancements, and must be looking at profitability," said one partner, who asked not to be named.

Among the upgrades introduced over the last year has been an infusion of artificial intelligence into all tiers of the product, and the release of an enterprise version of Google Voice, a telephony service long popular with consumers.

While comparing G Suite to Office 365 is an apples-to-oranges exercise, the price increase will make Google's product the more expensive option for many businesses.

Office 365 Business Essentials, the rough equivalent of G Suite Basic, costs $60 per year, meaning Google's service will no longer be less expensive with an annual commitment. That offering comes in at $6 per month—the same as G Suite Basic after the increase takes effect.

The E1 license for Office 365, at $8 per month, is already less expensive than G Suite Business, the comparable product.

It's to be expected that some businesses will be irritated by paying more. They might consider a migration to Microsoft's cloud service—especially those Google customers still maintaining licensed Office products for other business needs, the G Suite partner said.

"Anytime you're dealing with a life cycle, people will be more open to other alternatives. People will take a look," the partner told CRN. "We're going to have to come up a with a strategy to keep those customers if they decide not to stay on G Suite."

Microsoft Office 365 resellers will certainly seek to take advantage of Google's price increase.

"When a major player changes pricing on core collaboration, productivity and business applications, it can create a tipping point," said Darren Stordahl, vice president of sales and marketing at FMT Consultants, a Microsoft partner based in Carlsbad, Calif.

Price isn't the only issue, but it can be enough to re-prioritize purchasing decisions, Stordahl told CRN.

"While not every client chooses Microsoft solutions, with the [G Suite] pricing change and the latest technology and licensing enhancements from Microsoft, we think the timing is good for Microsoft to pick up new business," he said.

Last year, Microsoft upped the cost of its licensed Office solutions while not touching prices for Office 365—a move widely seen as an effort to push more legacy users to its cloud-based service.

G Suite boasts 1.4 billion individual users, across more than 4 million businesses, the company revealed in July at its Google Cloud Next 2018 conference in San Francisco.