Google Workspace, Cloud Services Price Changes: 5 Big Shifts

‘We’re announcing a few updates to our pricing to reflect the value in our products, alongside expanded commitment options to lock in the lowest pricing, providing our customers with more choice,’ says Google Workspace executive Steve Holt.

Google is changing its pricing, commitment plans and term options for Workspace and Google Cloud services in a move to offer more cost flexibility and choice for customers. However, some of these changes include an increase in costs, such as to Google Workspace’s Flexible Plan subscriptions for Business Starter, Business Standard and Business Plus editions.

“We’re announcing a few updates to our pricing to reflect the value in our products, alongside expanded commitment options to lock in the lowest pricing, providing our customers with more choice,” said Steve Holt, vice president of strategy for Google Workspace, in a blog post today.

Google Workspace is the company’s suite of collaboration and productivity apps that include tools like Gmail, Meet, Docs and Calendar, to name a few.

The Mountain View, Calif.-based company is also changing up-front commitments needed from Google Cloud customers.

Google Cloud executives say some organizations find it challenging to predict what cloud resources they’ll need in months or years ahead.

“To help, we’re developing new ways for customers to consume and pay for Google Cloud services. We’re doing this by removing barriers to entry, aligning cost to consumption and rewarding longer-term commitments,” said Google Cloud’s Kelly Ducourty, vice president, go-to-market Strategy and Operations; and Joe Matz, vice president of Business Planning and Pricing, blog post today.

Google Cloud is the world’s No. 3 market share leader in cloud services, according to new cloud market data from IT research firm Synergy Research Group. Google Cloud won 11 percent share of the global cloud market in fourth quarter 2022, trailing Microsoft at 23 percent share and Amazon Web Services at 33 percent share.

However, Google Cloud grew cloud sales at a higher rate in fourth quarter 2022 compared to Microsoft and AWS by generating sales of $7.3 billion during the quarter, representing a growth rate of 32 percent year over year. Google Cloud is looking to continue this type of customer growth by launching new pricing tiers for its cloud services as well as Google Workspace.

Here are the five big changes around pricing, spending commitment as well as completely new options for Google Workspace and Google Cloud solutions that all Google partners need to know about.

Google Workspace Flexible Plan Subscriptions Price Increase

Google is increasing the price of its Flexible Plan subscriptions. These new prices will officially roll out in April 2023 through 2024, depending on factors such as number of user licenses, current contract terms and payment plan.

For Workspace Business Starter, the Flexible Plan price is now $7.20 per user, per month, up from $6.

For Workspace Business Standard, the Flexible Plan price is now $14:40 per user, per month, up from $12.

For Workspace Business Plus, the Flexible Plan price is now $21.60 per user, per month, up from $18.

Flexible Plans offer customers the option to pay-as-you-go, with no commitment. The plan also provides customers the option to add or delete user accounts at any time, offering added flexibility for businesses with a variable-size workforce.

Google said starting March 14, 2023, new customers will be able to sign up for the new Annual Plan [explained in next slide] purchase option, and existing customers on the Flexible Plan can switch to the Annual Plan.

Increasing Price For Google Workspace Enterprise Standard

Google said it will also be increasing the price of Google Workspace Enterprise Standard. However, the company declined to provide figures on how much the price will increase.

The company is telling customers to connect with their account managers for more information.

There are no list price changes to any other Google Workspace Enterprise editions, including education upgrades.

The price increase to Google Workspace Enterprise reflects “the value we’ve added to the edition, including industry-leading security controls and administrative features designed for large enterprises,” said Google Workspace’s Vice President of Strategy Steve Holt.

Google Launches Annual Plan Option

Google is introducing an Annual Plan option for all Google Workspace editions. The company said Annual Plans are a way for organizations ready to commit to a longer-term agreement, which allows customers to lock-in the lowest price per-user.

For Workspace Business Starter, the Annual Plan price is $6 per user, per month.

For Workspace Business Standard, the Annual Plan price is $12 per user, per month.

For Workspace Business Plus, the Annual Plan price is $18 per user, per month.

When a customer selects the Annual Plan for their Google service, they commit to purchasing the service for a full year or multiple years. Customers are billed monthly for a portion of the commitment.

No Upfront Commitment Needed For Google Cloud Anymore

Google Cloud made a bold move today by launching Flex Agreements, which enables customers to migrate their workloads to the cloud with no up-front commitments.

As part of Google’s new licensing option, customers still get access to Google Cloud incentives monthly spending discounts, committed use discounts, cloud credits, and access to professional services.

“Some organizations find it challenging to predict what cloud resources they’ll need in months or years ahead,” said Google Cloud executives Ducourty and Matz. “Every organization is on its own unique cloud journey. To help, we’re developing new ways for customers to consume and pay for Google Cloud services. We’re doing this by removing barriers to entry, aligning cost to consumption and rewarding longer-term commitments.”

Three New Pricing Editions For Google Cloud

In addition to the launch of Flex Agreements, Google Cloud also unveiled today it will be creating three new pricing editions as part of its cloud portfolio: Standard, Enterprise, and Enterprise Plus.

The higher-end Enterprise Plus tier will offer compute, storage, networking and analytics services with high availability, multi-region support, regional failover and disaster recovery, advanced security, and a broad range of regulatory compliance support.

Google Cloud’s new Enterprise pricing tier will include a broad range of features designed for customers with workloads that demand a high level of scalability, flexibility, and reliability.

The Standard pricing tier will offer cost-efficient and easy-to-use managed services that include all essential capabilities such as autoscaling to meet the core workload requirements of customers.

“This new commercial packaging model will give customers more choice and flexibility to optimize their cloud spend,” said Google Cloud’s Ducourty and Matz.

Google’s three new Standard, Enterprise, and Enterprise Plus pricing editions will be rolled out over the next few quarters.