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Google Workspace Adds Subscription Service to Help Small Business Owners

  • Jackson Reynosa - SUBTA
  • Jun 16, 2021
  • 3 minute read

On Monday, Google announced a new subscription model that will give small business owners more tools to serve their clientele. The service is called “Google Workspace Individual” and includes cloud-based features to help business owners communicate better with customers and employees. 

The model will elaborate on the company’s eight-month-old Google Workspace, which consolidates all of its Google Suite applications (Gmail, Drive, Calendar, etc.) into one location. Through Google Workspace, users can maneuver efficiency across applications and enjoy new collaboration features for team projects.

Previously only available to businesses, classrooms and nonprofits, Google Workspace is now accessible in free and paid versions to any user with a Google account. The company will soon debut Google Workspace Individual, which will live within the existing resource of Google Workspace. 

Read on for a peek into Google’s latest strategy and find out how the tech giant is leveraging another subscription offering to grow its recurring revenue.

Dissecting Google Workspace Individual

Signing up for Google Workspace Individual will allow users to access “smart booking services, professional video meetings, and personalized email marketing,” according to the company’s blog

“Workspace Individual was created to help people focus their time on doing what they love — like meeting with customers and designing personalized services — and less time on everyday tasks like scheduling appointments and emailing customers,” said Kelly Waldher and Aparna Pappu, Google Workspace’s VP of Marketing and VP of Engineering, in Google’s blog. 

The service will roll out in six countries initially — the U.S., Canada, Mexico, Brazil, Australia, and Japan. While Google Workspace Individual is yet to launch, the company is accepting sign-ups to deliver project updates to interested users. In the meantime, Google is developing more features to increase the value within the new service.

Once launched, users can leverage their Google accounts to tap into Google Workspace Individual, which will be introduced at $9.99/mo. However, the company is implementing a temporary $2 per month discount (bringing the initial price to $7.99/mo) to supplement its customer acquisition strategy in the service’s early stages. 

“Within their existing Google account, subscribers can easily manage all their personal and professional commitments from one place with access to Google support to get the most out of their solution,” said Waldher and Pappu.

Creating Revenue Aside From Ads

Google acquires most of its revenue through advertising. The company is responsible for over 86% of global search traffic each year, beating out competitors like Yahoo and Bing. As a result, Google ads generated $142 billion in revenue in 2020.

Google’s parent company, Alphabet Inc., made $182 billion in online advertising last year, and over 80% of this came from Google’s ad revenue. 

Incorporating more subscription-based services will allow Google to drive revenue in a capacity apart from ads. 

Google Workspace is now available to all Google accounts, which means over two billion monthly Google Suite users can purchase a premium upgrade. Such widespread usage could significantly impact the company’s software-as-a-service-related profitability. 

“Cloud revenue,” or money made from the company’s productivity tools like Google Suite, contributed to just 7% of Google’s total 2020 revenue. Google aims to increase that revenue contribution with its new all-inclusive platform.

Google Workspace Individual can better appeal to entrepreneurs who need accessible tools to grow and scale their small-to-mid-sized businesses. Many of the company’s products have already proven to garner interest from businesses in this demographic. For instance, Gmail is used by 92% of small-sized U.S. companies and 60% of mid-sized companies. 

“Collaboration doesn’t stop at the workplace — our products have been optimized for broad participation, sharing and helpfulness since the beginning,” said Javier Soltero, the Vice President and General Manager of Google Workspace.

Key Takeaways: 

  • Google announced a new subscription model, Google Workspace Individual (introduced at $9.99/mo, and $7.99/mo with a temporary discount), which is aimed at helping small businesses grow and scale.
  • Last year, over 80% of Alphabet Inc’s revenue came from Google advertising. It hopes a new subscription model will impact Google’s SaaS-related revenue.
  • Google Workspace is now available in free and paid versions to any user with a Google account. Currently, there are two billion people using Google Suite on a monthly basis.

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