Google Apps Now Has Its (User) Limits


A story I wrote about Google's new reseller program for its Google Apps Premier Edition (GAPE) went live on our site yesterday.GAPE costs $50 a year per user, while the Standard Edition of Google Apps is free. GAPE includes more sophisticated administration capabilities, including added options for managing user accounts and the ability to archive e-mail documents.


Even though I had interviewed a Google product manager and several Google Apps users, I apparently was a little off the mark in describing GAPE as being free only for organizations with fewer than 200 users. I am in good company in my confusion, however, as TechCrunch's Michael Arrington made the same mistake. Dave Girouard, Google's president of Enterprise, contacted Arrington to set him straight, pointing out that until quite recently, there were no user caps for the free Standard Edition of Apps. The user "limits" were simply defaults.


"Admins could request any additional number (of free Standard Edition users) they wanted," Girouard wrote in an e-mail to Arrington. Based on my recent conversations with companies using Apps, however, I'd say many Apps users interpreted the defaults as limits. Though Apps is billed as being intuitive and easy-to-use for both users and admins alike, I wonder if folks wouldn't appreciate something like online tutorials from Google that would cover all the Apps basics and maybe some ideas on how to optimize Apps. (Maybe Google could use YouTube for this?) One of the Apps admins I interviewed, Sean McGonagle of Cultural Care, a provider of au pair services, mentioned he'd like to see some kind of an Apps forum where users could swap ideas.


Google seems aware that it needs to improve communications with Apps admins. Product manager Rishi Chandra told me the company recently introduced an RSS feed to help keep admins up-to-date on new Apps features as they are released.


Google did decide to limit free user accounts to 50 per organization with the launch of the reseller program, Girouard clarified in his e-mail to Arrington. But he took issue with Arrington's take on it, which was that Google wanted to boost Apps income. (Guy Creese, a Burton Group analyst I interviewed for my story, had exactly the same take.)


Most larger companies already opt for the paid Premier Edition, writes Girouard. The cap was put in place simply to attract sales partners who might have otherwise been put off by the idea of "competing" against the free Standard Edition of Apps. Google's plan all along was to pitch a paid version of Apps to organizations of 50 or more, while providing "a very viable ad-supported product" for smaller organizations, which tend to have needs and mind sets more akin to consumers. Writes Girouard:


We designed our approach to get a massive user base, and then to get increased monetization as more bigger companies adopt. This isn't the same as saying that we want to get companies started on "free" and get them to pay later - that's a relatively small effect in my view. Both user growth and revenue is in fact accelerating. Maturity of the product accounts for that, though we still have a ways to go.


Joel Colombo, president and managing partner of Web services provider 360psg.com, one of the folks I interviewed for a story on the business potential of Apps, contacted me shortly after Google's announcement of the new limit. While his company has been recommending Apps to many of its own clients, he says the limit will make it a harder sell. He wrote:


This now limits our ability to add some clients looking to get into it. If we can't get them hooked on it for free, how can we convince them that spending $2,500 a year is worth it? Have to see how it plays out.


Fortunately, Colombo notes, Google grandfathered existing Apps accounts, so current Standard Edition companies with 50 or more users won't be faced with the decision of whether to drop Apps or upgrade to the paid version. Colombo also appears to think GAPE has potential with a good number of smallish companies, as 360psg.com hopes to become an Apps reseller under the new program.