On its official enterprise blog site, Google Inc. (GOOG) announced Monday that it is kicking off a new referral program for its online office and productivity programs, Google Apps. The company is offering current Google Apps users $15 as a reward for referring a new user.
The short blog post mostly touts the benefits of Google Apps and includes a link to a page where current users can sign up to become part of the referral program.
Google's stiffest competition likely comes from Microsoft Corp. (MSFT) and the Redmond giant's Office 365 suite of cloud-based apps. In a recent direct comparison on the two offerings, Microsoft’s Office 365 scored an 8.5 on Infoworld's test scorecard, compared with an 8.0 for Google Apps.
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Price is one obvious difference. Google Apps costs $50 a year for the basic package and $120 a year for the premium package. Office 365 starts at $150 per user for a small business premium package, although Office Web apps are free with a SkyDrive account, which is also free. The Microsoft pricing scheme offers a plethora of options that you are free to look up on your own.
As with all Google products, the Apps are priced low to attract users into the Google ecosystem, where the company can serve more ads to more people. That is where Google's revenues come from, not from annual subscription fees. The annual fee is probably just enough to pay some of the development cost overhead and to convince users that Google Apps is a legitimate contender to Office 365. After all, if Google Apps were free, how good could it be?