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Summary:

Updated: Google reportedly earned $1 billion from Google Apps for Business last year. While that pales in comparison to Microsoft Office numbers, it’s still not chump change.

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Updated: Google Apps for Business appears to be gaining critical mass. Google will now charge for workgroups of 10 people using Google Apps, although small workgroups already using the cloud-based productivity tools can keep using them for free. When Google launched the offering in  2006 as a way to build an enterprise software business, it was free for up to 200 users. That limit has been reduced several times over the years to 10.

This change indicates that Google is treating Apps for Business as a real business  albeit a tiny one compared to the company’s huge search operation. According to a Wall Street Journal report  the company sold $1 billion worth of Google Apps for Business last year — a contention Google would not confirm. That amount is itty bitty compared to the multiple billions Microsoft earns on its Office juggernaut annually but is still a respectable number if true. For its FY 2011, ending last June, Microsoft Business Division — which includes Office —  generated $21.99 billion in revenue.

At Google I/O in June, Google said it had 5 million Google Apps business customers but did not break out paid versus unpaid.

The news of changes to the Google Apps sales plan was posted on the Google Enterprise blog late Thursday. According to the post, people wanting to keep using freebies can create personal accounts for Gmail and Google Drive. But even small businesses may opt Google Apps for Business for $50 per user per year, in return for which they get phone support, 25 GB of storage and service level agreements of 99.9 percent.

It’s unclear what impact, if any, Microsoft’s cloud-based Office 365 is having on Google Apps adoption. Update:  And interestingly, IBM which bought Lotus, along with its Office-wannabe SmartSuite years ago, is apparently back in the game, according to InformationWeek. 

IBM SmartCloud Docs, according to that story is:

“available for $3 per user, per month, as an add-on to SmartCloud Engage Standard and the IBM Connections networking platform. IBM also added new features, such as enhanced presence awareness, to its SmartCloud for Social Business service.”

Note to IBM:  SmartCloud Engage Standard? SmartCloud for Social Business? Let’s do something about these names or neither Google nor Microsoft will have much to worry about.

  1. Jack N Fran Farrell Friday, December 7, 2012

    It is obvious what Google’s small business apps will have outside of USA and EU. First Google will cut the price of Business-Apps to $1 a month. Next 1B small business women will pay $1 a month to wise up their husbands. Killing two birds with $1 a month: chauvinistic old boys and MS Office.

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  2. Having used Google Apps for over 3 years for Server Density, the current version brings in a lot of very useful tools which can’t be matched elsewhere. We use GMail, Calendar and Google+ extensively every day, both on web and through mobile. They all work very well together too, with calendar invites and G+ commenting inline through GMail.

    Tech support is also excellent. This is available by e-mail and phone 24/7 and every time we’ve e-mailed them recently, we’ve received a good answer within a couple of hours through a followup phone call.

    I think the next interesting thing will be how Drive and Docs continue to be developed to really take on the core MS Office suite.

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  3. The whole idea of using Google Apps is it’s free and it can be accessed from anywhere.
    It was never because it is better or easier than Microsoft Office suite installed on a local computer. Indeed, running business productivity applications inside of a web browser is so awkward and limited, not to mention it is slower, and you cannot use it without Internet connection (e.g. on an airplane). Now it is no longer free, SMBs really should look for better alternatives. DriveHQ.com has offered cloud IT service to SMBs since 2003. It is a one-stop shop for all core IT services such as file server, email server, FTP server, static web server, online backup, folder synchronization, group file sharing and collaboration with user access control. It has tons of high-end business features all bundled for the same low prices. Our user license costs only $0.6/user/month, why not give it a try?

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  4. LANhome TECHnologies Saturday, December 8, 2012

    Actually, Google Apps now work great whether or not you are connected with Offline mode. Not to mention the continuing trend to always connected, last week even the usage of tablets etc. is being considered for all times onboard the aircraft.

    Cloud based web and mobile services are the future and the future is now!

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  5. Barb – I read the article a few times, since I figured I was missing something – is the whole point of the article that Google is now going to charge for Google Apps? I don’t quite get why that means anything different to Microsoft or IBM – Google had always offered ‘premium’ anyway. While I agree with the name – have you even looked at the IBM offering? in the end – its not all about Documents – either in the MS or the IBM offering.

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