Google LLC has decided to increase the subscription fees for some of its G Suite business packages.

It’s said to be the first time ever that Google has increased its prices for G Suite, which is a set of productivity tools that competes with Microsoft Corp.’s Office 365 suite.

The hikes mean that G Suite Basic will now cost $6 per user per month, up from the $5 it charged previously. The G Suite Business package now costs $12 per user per month, up from $10. However, Google said the price of its premium G Suite Enterprise package will remain at $25 per user per month.

On a competitive basis, the move means that G Suite now costs more or less the same as Office 365. Microsoft’s pricing is a bit more complex as it depends on the exact apps and services used, but the Office 365 Business Essentials package starts at $5 per user per month.

Office 365 Business is priced at $8.25 a month, while Office 365 Business Premium costs $12.50 per month. Meanwhile, Microsoft’s premium Office 365 Enterprise E3 and E5 packages cost $20 and $35 per user per month, respectively.

Although the costs of G Suite and Office are now more or less comparable, some smaller businesses might feel a bit aggrieved over what amounts a 20 percent price increase. For example, a small business with five G Suite users will see its annual costs rise from $300 to $360. A business with 100 users would see costs rise from $12,000 to $14,000 per year.

Still, Google argued that its prices still offer a lot of value, pointing to dozens of new features and services added to G Suite since its launch in 2006. They include videoconferencing software such as Hangouts, more storage space and tons of new security tools.

Assuming that its customers decided to swallow the price increases, Google will likely benefit from a substantial increase in revenue. Some 4 million businesses are currently using G Suite, which is said to account for around half of the firm’s total cloud revenue.

The new prices will go into effect on April 2, Google said. Those with current subscriptions will pay the new price once their contracts come up for renewal.

Image: Google