In a strategic move to bolster its suite of productivity applications, tech giant Google has announced a new pricing model for its Duet AI technology. Under this model, large businesses will be charged $30 per user per month for access to AI-enhanced features in applications like Gmail and Google Docs. The announcement comes as Google aims to further compete with its counterparts, notably Microsoft, in the realm of AI-powered productivity tools.
Termed Duet AI, Google’s latest technology offering is set to cost the same as Microsoft’s 365 Copilot enhancements, which are expected to be available in the coming months. Both companies have been on a race to integrate generative AI capabilities into their core products, following the trailblazing release of OpenAI’s ChatGPT chatbot last year.
The new fees will be in addition to the existing subscription charges for the productivity suite. Google, however, is allowing companies to test the waters with free trials before making a commitment to the subscription. While the pricing structure for smaller organizations and individual users is yet to be finalized, Aparna Pappu, Google Workspace’s Vice President and General Manager, affirmed that the pricing was determined while considering customer willingness to pay for the value proposition bundled into the AI technology.
Google’s foray into monetizing its AI technology began in May when it quietly started taking preorders for Duet AI for Google Workspace at the $30 per user price point. It was later clarified that the preorders began in June, and this was followed by Microsoft’s pricing announcement in July.
Expressing a degree of surprise at the similarity in pricing models, Pappu remarked, “We were a little surprised to see our friends in Redmond come up with the exact same pricing model that we had.” It’s worth noting that Microsoft is based in Redmond, Washington.
While Google derives the majority of its revenue from online advertising, it’s striving to reduce its reliance on this revenue stream by diversifying into business software. Google Workspace revenue falls under the Google Cloud category within parent company Alphabet, alongside its cloud infrastructure services. In contrast, Microsoft’s revenue is heavily influenced by its Office products and cloud services.
Google has been steadily expanding its Workspace customer base. The company announced that it now boasts 10 million paying customers, a notable increase from 9 million in March and 6 million in 2020. The new AI capabilities have also been widely embraced, with over a million individuals participating in a “trusted tester” program to explore its potential. Currently, more than a thousand customers are actively using these AI-enhanced tools in trial environments.
With these advancements, Google is positioning itself as a frontrunner in AI-driven productivity solutions, vying for a larger share of the lucrative enterprise software market. As competition continues to heat up, businesses can look forward to a more streamlined and efficient workspace experience, powered by cutting-edge AI technologies.