Google will raise prices on its G Suite for the first time ever, as competition with Microsoft Office 365 heats up

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Google Cloud CEO Thomas Kurian

• Google will raise prices on G Suite - the company's productivity suite - for the first time ever, according to a corporate blog post on Wednesday.
• Starting on April 2nd, The cost of G Suite Basic will increase from $5 to $6 per user per month, and the cost of G Suite Business will move from $10 to $12.
• Google justified the 20% increase for its Basic and Business Editions by saying that it has not updated prices since introducing G Suite over a decade ago, while its product offering has grown substantially.

Google will raise prices on G Suite - the company's productivity suite, and its rival to Microsoft Office - for the first time ever, according to a corporate blog post on Wednesday.

As of April 2nd, the cost of G Suite Basic will increase from $5 to $6 per user per month, and the cost of the higher-end G Suite Business will move from $10 to $12. The price of G Suite Enterprise Edition, which is already sold in bulk to its largest customers, will not change.

Google justified the 20% increase for its Basic and Business Editions by saying that it has not updated prices since introducing G Suite over a decade ago, while its product offering has grown substantially. Today, G Suite users have access to a number of tools including Gmail, Docs, Sheets, Drive, Hangouts Meet, Hangouts Chat, and more.

The new $12 price for G Suite Business brings its price roughly in line with Microsoft's Office 365 Business Premium plan, which costs $12.50 per user per month.

Historically, Microsoft has been especially successful at conquering the higher end of the market, with G Suite's cheaper price point as one of its major competitive selling points - though even at $12/user/month, G Suite is still much less expensive than Microsoft's popular Office 365 E3 plan for larger businesses, which costs $20/user/month.

The price increase also comes in the wake of a leadership change at Google Cloud, which is responsible for G Suite and the search giant's other offerings for business. Oracle veteran Thomas Kurian officially took over as Google Cloud CEO at the beginning of the month, replacing Diane Greene in the role.

Read more: Meet the 22-year Oracle veteran executive who's going to lead Google in the cloud wars against Amazon and Microsoft



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