Google’s too Cheap

The NYT is reporting that Google is ruffling feathers in the enterprise software industry by charging too little. Google bought enterprise email solution provider Postini for $625 million last year and has started offering the companies email filtering and monitoring technologies as part of it’s Google Apps suite – at upto a 90% discount.

Customers must be pleased as Postini’s services which used to cost between $30 and $100 per year per user, now range from $3 to $25 per year. In the same way Gmail shook up the webmail space by giving away too much and charging too little, Google’s recent offering has left left competitors floundering as they attempt to match the new offerings. Although, it has been suggested that the enteprise market is far less sensitive to price than the consumer market. The NTY speculates that no matter how cheap Google’s data centers allow them to offer the software for, enterprise customers value support quality far more than price.

Complaining loudest, however, are Postini’s re-sellers, who had carved a niche offering Postini’s products and enterprise support as a package, and who have now been cut out of the distribution stream for all but the very smallest customers. In the past Postini only sold directly to clients with over a thousand mailboxes – and all clients with fewer mailboxes had to approach resellers. Google has announced that they will deal directly with customers with as few as 60 mailboxes.