Why SMBs aren't upgrading from free Google Apps

It's hard to argue with free. But when it comes to Apps, Google is certainly trying. It's just that some SMBs are not buying it.

Software vendors like 37Signals have used the one-month free trial to get companies to use their web-based collaboration software for nearly a decade. Heck, even my own company gives away a 20-hour audio training course to get people interested in taking our bigger products out for a test drive. Google tries to whet the appetites of their SMB customers with a 30-day trial of Google Apps, and the trial has a decent cash value - a few hundred bucks.

Lately though, I've come across dozens of small and medium businesses that simply choose not to pay for Google Apps. These are usually smaller shops, with under 20 employees. Financially, using the paid version of Google Apps does have a cost - typically, the software alone would cost a small firm (20 people) about $1000/year. Consider, though, that the very same company would have paid the same fee for three Microsoft Office licenses a few years ago.

What the ...

In a hilariously titled 2009 blog post, TechCrunch's Michael Arrington pointed out what many small companies found pretty jarring, one July morning: "What The Hell Happened To The Free Version of Google Apps?"

Remember, when Apps was launched in 2006, it was first aimed at being a free product, offered to organizations with under 250 users. Then, in 2007 that cap was reduced to 50 users. Then, in 2009, the free corporate version disappeared, for a few days. It was quickly replaced with the links to Standard Version (what end-users use), hours after Arrington's blog post. Google trimmed the 50-user limit back down to 10 users last April.

So why are SMBs (especially the small ones) so cagey about shelling out for Google Apps Business edition? Here's what we've heard"

  • The standard version is good enough, and works for up to 10 users.
  • Nobody needs to use Google Video or Google Groups For Business - one of the features of Google Apps For Business
  • They've been burned by AdWords, and are cagey about paying for another Google product
  • There's a perception that the free version of Google Apps has all of the same features
  • SLAs don't matter - I've never heard a Google Apps user complaining that their Apps were down, ever
  • They don't use Blackberries or Microsoft Outlook - this removes another need for Google Apps For Business
  • The look keeps changing - this really annoys SMBs, even though the changed look was designed to make corporate users happier

Our prediction is that Google will lower the 10-user limit to 5 users sometime this year. While this will annoy hundreds of thousands of small companies, it will make millions for Google, and likely not set these small companies back that much. It won't be great for goodwill, but the productivity gains that these companies see from the change will likely, eventually, make up for the hard feelings.

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Adam Metz is the VP of Business Development at Metz Consulting the social concept, a social customer management-consulting firm, based in Oakland, California. Metz has consulted with companies since 2006 on how to acquire, manage, monetize and retain...

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