Google will no longer charge Workspace customers an additional fee for Gemini, expanding access to generative AI (genAI) features in apps such as Gmail, Docs, and Sheets. At the same time, the company is increasing the price of Workspace subscriptions by a small amount.
“Google is disrupting a market while some application vendors are still trying to monetize generative AI,” said Wayne Kurtzman, research vice president for collaboration and communities at IDC. It’s an “unusually bold first move” by Google, one that “should result in paid user growth of their Workspace platform.
“We are moving to an economy where we will experience AI everywhere, so it makes sense that we see AI included in office and collaboration applications,” said Kurtzman.
Google launched its Gemini AI assistant (formerly Duet AI for Google Workspace) in August 2023. There were two main add-ons: Gemini Business priced at $20 per user per month, and Gemini Enterprise, which cost $30 per user per month. Each represented a significant outlay for Workspace customers on top of their core subscriptions; Google later introduced more affordable add-on options that provided a limited set of genAI tools: AI Meetings and Messages and AI Security, both costing $10 per user a month.
All of those subscription costs will end as of March 17, Google said in a blog post Wednesday.
Instead, Gemini features will be included in regular paid Workspace plans from the Business Standard plan upwards. That will allow access to Gemini in the side panel of several Workspace apps, as well as automated note taking in Meet video calls, image generation in Docs and Slides, and access to the NotebookLM Plus app.
(Google has a detailed list of the AI features available and coming soon to each payment plan at its admin help site here.)
At the same time, the price of payment plans will increase. Business Standard will rise from $12 to $14 per user each month when paid on an annual basis; Business Plus customers will see a more substantial increase — from $18 to $22 per user a month. The Business Starter plan, which will provide access to limited Gemini capabilities, will go from $6 to $7 per user a month.
Google doesn’t provide details on the Workspace Enterprise tier publically.
The change to pricing will begin today, Google said.
The move could be seen as the commodification of genAI; more than two years after ChatGPT 3.5 launched, AI assistant tools have become common and vendors have shifted their attention to more advanced AI agents. Or Google may have moved on from its attempt to convince customers to pay a premium for Gemini over and above the base subscription costs.
“While there’s an element of truth to both, Google’s sales channel and customers may well celebrate,” J.P. Gownder, vice president and principal analyst on Forrester’s Future of Work team, said in a blog post about the announcement.
One implication of the decision is to make genAI tools available to all employees with access to Workspace; due to the high per-user cost, many customers might have been selective about handing out licenses, dividing knowledge workers into AI “haves” and “have-nots.”
“This pricing change effectively removes a company’s need to determine who will get an AI productivity boost, and who will not,” said Kurtzman. “This should expand the number of paid seats of Google Workspace, as the value prop of usability and AI are clear.”
It could also convince more companies to switch to the paid version of Workspace.
“Many companies still use the free version of Google Workspace to access collaborative features that their current applications do not support,” said Kurtzman. “The inclusion of AI and a price point much lower than many competitors should result in additional paid users to Google Workspace.”
Google’s move will clearly put pressure on Microsoft — which charges $30 per user a month for its M365 Copilot add-on — to follow suit, as well as other productivity software vendors that charge an extra fee for access to genAI capabilities. (Zoom is a notable exception, having included its AI Companion in its apps at no extra cost since launch.)
As the cost of running large language models (LLMs) drops, this is a natural direction of travel: Gartneranalysts have said they expect genAI features to be included at no extra cost in office software subscriptions by 2028, according to a recent report (subscription required), as vendors seek broader adoption of their tools.
Price cuts will likely spur wider adoption. Microsoft has found it difficult to convince large numbers of customers to adopt its M365 Copilot widely across their organizations, with subscription costs one of the barriers. Microsoft has already bundled Copilot into consumer M365 subscriptions in some countries and willlikely do the same for business customers eventually.
“How long can Microsoft hold the line — and for how long — on $30/user/month? We’re betting the pricing strategy evolves,” said Gownder.
