What The Hell America!

If you’re in one of the nine million organizations that use Google Workspace, your company likely just received notice that it’ll have to fork over a lot more cash to use its ubiquitous office applications. The monthly price for business plans is jumping 16 percent, from $14.40 to $16.80. If all three billion Google Workspace users paid that standard increase, that would equal an additional $7.2 billion in monthly revenue for the company. At the same time, Google’s cloud division, which houses Workspace, slashed its workforce this week, though the exact number of staff layoffs is unknown.

It’s increasingly difficult for businesses to respond to such new levies (read: junk fees) by simply opting out of Google’s tools because there’s not much competition. Alphabet is the premiere monopolist when it comes to cloud-computing — rough estimates suggest Google Workspace, which includes features like Gmail and Google Docs, has captured anywhere from 44 to 79 percent of the market for cloud-based office software. . . and Microsoft 365 is its only other major competitor.

Google justified the price increase — following a previous increase of 20 percent in 2023 — by asserting it is for “AI features designed to improve productivity and innovation in organizations.” Previously, its AI Gemini feature was offered as an add-on option that customers could choose to pay $20 a month for. But when it didn’t take off, the company added Gemini to its standard services and jacked up the price for everyone. And if you still don’t want to use its resource-guzzling artificial intelligence, the company has made it almost impossible to shut it off.

During a recent earnings call, Google CEO Sundar Pichai explained that Google Cloud’s operating margin recently jumped from 9.4 percent to 17.5 percent and that “healthy Google Workspace growth was primarily driven by increase in average revenue per seat” — i.e., boosting prices with little fear of competition. If that sounds familiar, perhaps that’s because the move was executed by Google executive Jerry Dischler, who came to Workspace from Google Search after he admitted during Google’s antitrust case in 2023 that the company used its market power to increase prices on advertisers.