07/12/2012 07:38 GMT | Updated 12/03/2013 11:08 GMT

Google: Small Businesses Will Have To Pay For Our Office Software

Google will start to charge small businesses for access to its web-based office software, including Gmail, as part of a drive to increase revenues outside its core web advertising business.

The internet giant said on Thursday in a blog post that small businesses with 10 or fewer users will, for the first time, have to pay to use its online app platform. All businesses will now be charged US$50 (£31) per user, per year, for the service.

Google Apps will remain free for individual users however, and existing business customers that currently use the free version will not be charged.

Clay Bavor, director of product management at Google Apps, wrote in a blog post: "Google Apps started with the simple idea that Gmail could help businesses and schools work better together without the hassles of managing software and servers.

"As we grew from a handful of customers to a few hundred, we expanded to offer a premium business version of Google Apps. Fast forward to today and Google Apps is used by millions of businesses. We've also added versions for governments, universities and schools.

"When we launched the premium business version we kept our free, basic version as well. Both businesses and individuals signed up for this version, but time has shown that in practice, the experience isn't quite right for either group. Businesses quickly outgrow the basic version and want things like 24/7 customer support and larger inboxes. Similarly, consumers often have to wait to get new features while we make them business-ready."

For new businesses customers, including small businesses,there will be just one apps package, which includes 24/7 phone support for any issue, a 25GB inbox, and a '99.9% uptime guarantee' with no scheduled downtime.

Google Apps for Education will continue to be offered as a free service for schools and universities.

"With focus we'll be able to do even more for our business customers. We're excited about the opportunity to push Google Apps further so our customers can do what matters most to them–whether that’s scooping ice cream, changing the face of healthcare or contributing to lifelong learning," Bavor concluded.

The Wall Street Journal reported that subscriptions to Google Apps and its mapping service for businesses and governments have brought $1 billion (£0.6bn) in revenue over the past year.

More than five million businesses are said to use Google Apps, but the overwhelming majority use the free version. The service - both free and paid - is said to be used by more than 40m users worldwide.


One SME director has told Huff Post UK entrepreneurs and one-man businesses may be put off using Google's office software as a result of the move, and may even seek to circumvent the subscription.

Elliot Cowan, creative director at Br&ish, told Huff Post UK: "I can see why Google's starting to charge small businesses, but when you're starting out, you look for anything that can give you a leg up. Google's software is very intuitive and helpful, but you're always going to look for something for free.

"I'm sure we'll see people taking out individual accounts and then using them for their business, or trying to find some other way around the subscription. If you've only got one member of staff, that £33 subscription is a commitment, not a one-off fee like you would have with, say, Microsoft Office."