Google Introduces New Pricing Model for AI Enhancements in Gmail and Productivity Apps

Google has announced its plan to charge large businesses $30 per month for each user of its artificial intelligence (AI) enhancements, called Duet AI, that are being added to Gmail and other productivity apps. This move is in direct competition with Microsoft’s 365 Copilot enhancements, which are expected to be available in the first half of next year. Both companies are racing to integrate generative AI into their core products following the success of OpenAI’s ChatGPT chatbot. However, these fees will be in addition to what companies are already paying for their subscriptions to the productivity suites.

Google has set the price for Duet AI based on the willingness of customers to pay for the added value it provides. Aparna Pappu, Google Workspace’s vice president and general manager, stated that the pricing was carefully considered and determined after taking customer preferences into account. Although the pricing was not publicly disclosed, Google began taking preorders at the $30 per user price in June. Microsoft, on the other hand, announced its pricing for 365 Copilot in July, which coincidentally matched Google’s pricing model. Pappu expressed surprise at Microsoft’s decision to adopt the same pricing structure.

While Google relies heavily on internet search and online advertising for revenue, it has been making significant progress in the business software market against Microsoft. Google Workspace, which falls under Alphabet’s Google Cloud category, generated $8 billion in revenue in the second quarter. In comparison, Office products and cloud services amassed $13.5 billion in revenue for Microsoft during the same period. Google’s increasing market share is evident in its growing customer base, with 10 million paying customers as of March, compared to 9 million just three months prior and 6 million in 2020.

Duet AI offers various capabilities to enhance productivity across different Google apps. In Gmail and Google Docs, users can simply input a text prompt and instruct Duet AI to generate a result. Google Slides enables users to create images by describing them in a few words. Furthermore, Duet AI can assist in project planning in Google Sheets and can take notes during Google Meet video calls for absent participants. These AI capabilities have been tested by over a million people through a trusted tester program, and more than 1,000 customers are currently trialing the tools.

Microsoft’s 365 Copilot offers similar AI features to those provided by Google’s Duet AI. The company introduced a paid early access program for 600 clients in May. This move indicates that Microsoft is determined to compete with Google in the AI-enhanced productivity space and attract more customers to its suite of products. While both companies are offering similar functionality, the competition will likely depend on factors such as the ease of use, integration with existing workflows, and overall value for customers.

Google’s plans to expand Duet AI availability to a consumer version for Google Workspace early next year highlight the company’s commitment to advancing AI integration in productivity tools. As AI technology matures and becomes more accessible, businesses and individuals will have the opportunity to leverage its capabilities to streamline their workflows and improve productivity. However, it remains to be seen how companies and individual users will respond to the new pricing model and whether they will perceive the added value of AI enhancements as worth the additional cost.

Google’s introduction of a pricing model for AI enhancements in Gmail and other productivity apps marks a significant move in the race to integrate AI into everyday work processes. The competition between Google and Microsoft is driving innovation and providing customers with more options to enhance their productivity. As AI continues to evolve, businesses and individuals must carefully consider the value it brings and weigh it against the associated costs before making a decision.

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