When Free isn’t Free

Google has been slowly lowering the number of users a business can have on the free version of Google Apps, the conglomeration of online applications like Gmail, Google Calendar and Google Docs, that many business use in place of desktop productivity tools.

In August of 2006 when the service was first launched it was "free to organizations of all shapes and sizes" (as long as all sizes meant less than 200). The number of free users has continued to shrink and is now down to 50. Above that and an organization has to pay the $50/user per year for the premium version.

Clearly Google has every right to charge for its services, but I wonder how many organizations of say 100 users would have invested the time and energy embedding their suite of tools if they knew that it would cost them $5000 every year? Clearly, that is a bargain compared to some options, but maybe not when compared to Yahoo's Zimbra ($25-$35/user per year).

Currently, more than 1 million businesses and over 10 million users consume Google Apps services. Another 3000, or so, new business are added daily. The vast majority of these are free users (they select to see adds within their services) so this revenue stream is a drop in Google's revenue bucket. Of course these days...every little bit helps.