3 things businesses should know about Google's G Suite price increase

Google is raising prices for G Suite Basic and G Suite Business productivity suites for the first time. Here's how much you'll have to pay.

Google's G Suite price increases: G Suite Basic to $6 a month per user, business to $12 a month Google argues the price increases for G Suite mean more value. The G Suite Enterprise prices stay the same.

The more than 4 million organizations using Google's G Suite productivity tools will see a price increase for the first time, Google announced in a Wednesday blog post.

Here are three things your business needs to know about the upcoming changes:

SEE: Google Drive: Tips and tricks for business professionals (Tech Pro Research)

1. How much more will your business have to pay after Google's G Suite price increase?

G Suite Basic edition will increase from $5 to $6 per user/month. G Suite Business Edition will increase from $10 to $12 per user/month at that time. Pricing for G Suite Enterprise Edition customers will remain at $25 per user/month.

For current G Suite Basic or Business Edition customers on the Flexible Plan, the new prices will go into effect on April 2. For those on the Annual Plan, the new prices will go into effect the first time their plan renews on or after April 2. The changes will not impact current contracts or renewals before that date, Google said in the post.

This means a small business with five G Suite users will see annual costs rise from $300 to $360, ZDNet's Larry Dignan reported. A business with 100 G Suite users will see annual costs increase from $12,000 to $14,400.

Basic and Business Edition customers who purchase directly from Google will receive an email with specific details by February 28. Those who license G Suite through third parties should hear from their partners directly regarding the new pricing.

SEE: Cost comparison calculator: G Suite vs. Office 365 (Tech Pro Research)

2. Why is Google raising the price?

Google claims in the post that it has brought more than a dozen new G Suite services to businesses over the years, including Hangouts Meet for video conferencing, Hangouts Chat for secure team messaging, and Cloud Search for enterprise-grade search capabilities, as well as enhanced artificial intelligence (AI) capabilities in all products. Despite making so many additions, this is the first time the company has raised the price, the post noted.

3. Will Google's G Suite price increase drive more businesses to Office 365?

The new pricing puts G Suite more in line with Microsoft Office 365 when it comes to pricing, Dignan noted. Office 365 Business Essentials costs $5 per user/month for an annual plan. Office 365 Business is $8.25 per user/month, and Office 365 Business Premium is $12.50 per user/month annually. Those plans are small business-focused, with the maximum number of users set at 300 for each.

However, Office 365 Enterprise E3 costs $20 per user/month, and E5 costs $35 users/month, Dignan noted. Microsoft has also raised prices on Office products to push customers to move to the cloud.

While Google's argument for increasing the price due to the value add is valid, Dignan noted, the costs may add up, particularly for larger businesses. But if an organization has come to depend on the productivity suite, they may just pay up instead of making the effort to change over.

For more tips on how to choose the right G Suite edition for your enterprise, check out this TechRepublic story.

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Image: CNET

By Alison DeNisco Rayome

Alison DeNisco Rayome is a Senior Editor for TechRepublic. She covers CXO, cybersecurity, and the convergence of tech and the workplace.