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by dotBen
1214 days ago
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Even at twice the price, the value of the collective Google Workspaces suite for most people is a no brainer. I pay more per month to the calendar scheduling SaaS provider I use than I do to Google - who provide the calendar plus email, drive, docs, meet, etc. An important lesson here for founders is price anchoring. Google is in a tough place because the prices are anchored to historically low amounts - they're increasing them by $1/m because that's about all they can do and the talk of 'all the next value' is their best attempt to break out of that anchor. If they were to bring this suite to the market today, I bet it would start at the $20/m mark. |
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Maybe people just really prefer Gmail? I know people have negative feelings toward Microsoft Teams.
I guess with Google Workspace, I'm not quite sure how it's that different from what people are used to getting for free (other than with corporate permissions). Google's $6 plan doesn't really include much for storage and their $12 feels like Microsoft's $6 plan.
If Google is in a tough place, I'd argue it's because they anchored their pricing to free with their consumer offerings. You're not wrong that Workspaces provides a lot of value compared to a lot of subscriptions. At the same time, it's something people are accustomed to getting for free and the $6 plan doesn't really offer much on top of their free services. Microsoft is throwing storage at their low-tier plan - offering a clear differentiator from their free service. Microsoft is offering their Office suite for their mid-tier plan - something that is a $440 purchase or $12/mo over the course of 3 years; you're basically getting all the services for free for the price of Microsoft Office. Microsoft is offering lots of device management tools that businesses need in their high-tier plan.
You are totally right that Google's pricing is low for some definition of low. Lots of SaaS that does a lot less costs more. It's just that Microsoft seems to be throwing more value for your dollar at the problem. If you're going to be buying the Office suite for a lot of your employees, wouldn't it make more sense to buy Microsoft 365? Or are Google's services so superior that you'd rather pay twice? That's not a rhetorical question, it's just been a while since I've had a basis of comparison.
Ultimately, you're right. It's kinda silly for businesses to quibble over even $50/mo/user given that they might be paying their employees more than that per hour. But I think that people aren't always rational when it comes to pricing and Microsoft is likely counting on that with their offering.