The Business of Google Apps for Business

Last Friday, the Wall Street Journal reported that Google was removing its "freemium" option on its wildly popular Google Apps for Businesses suite.  According to Google, allowing the software to be free to businesses of 10 users or less prevented them from generating the revenue that allowed Google to provide adequate, dedicated customer service to that part of the market. Google estimated that in 2012 over 40 million businesses worldwide used Google Apps for Businesses, and 5 million of these used the free version.  Since Google's revenue estimate for GAfB was about $1B in 2012 (according to the article), a back-of-the-envelope calculation would peg the expected revenue boost from removing the free option at $143M or so. 

But is this the right move for Google to make?  Many small businesses signed up to use GAfB only because it WAS free; my company, Sloan Sports Group, was one of those.  While I admit that the tools suite that GAfB offers is extensive, powerful, and useful for small businesses, I also admit that the only feature I use regularly - i.e. 95% of the time - and thus couldn't do without is GMail.  I use Google Drive sparingly, but that's about it.  And when it comes to small businesses, I'm sure my usage pattern is representative of this segment.

Google announced that those under the "freemium" option would be grandfathered in and still have those types of accounts, but all new sign-ups would be paid accounts only.  So while the announcement doesn't affect me, if I had to do it again I don't know if I would choose GMail over the free and "freemium" marketplace options such as Yahoo! Mail or Microsoft Exchange.  GAfB is so easy to use that not once in our company's 3+ years of using it have I had to call customer service to figure something out.  While this is high praise for the Google techies who have created GAfB (Attention nerds: congrats, it works!!!), it also makes me question whether Google REALLY would need to expand their customer service reach at the expense of limiting their brand growth to a bigger customer base.  Is this just another attempt by a greedy industry titan to soullessly wring out extra dollars from the bottom of the consumer pyramid?  Perhaps, unless Google can magically prove to the business community that it has the magic touch for fixing what ain't broken.