It tells me they're trying to minimize the number of users (which reduces their costs) by raising the price while still making it profitable. They raise prices rapidly to see how many people jump ship, and when your revenue begins to decline you've gone a bit too far.
Of course, they've done it very quickly, so they've likely not allowed enough time for the competition to step in or all their customers to abandon your now-expensive product.
Is the marginal cost of serving extra users really a big part of Google's costs? Bandwidth is cheap; I would have expected that building and updating the map data was the expensive part.
Unless the vector information is getting much more expensive (shouldn't be, they own Waze and GMaps mobile products to make their own maps from user data), the cost of running GMaps should be going down on a per user bases, not up.
See this is the important thing. Sustainable. People and companies use these free services that take quite a bit of work to maintain and then when the company decides it needs to stop hemorrhaging money they start charging, often a fairly modest fee, and people lose their damn minds "ermagerd, you're evil, I need this, you can't expect me to pay!". The simple fact that adding a price, or increasing the price, creates such an outrage is indicative, more oft than not, that it is a fair move because the service or good has obvious value to the user.
People lost their damn minds when Netflix increased prices a year or two ago and I'm like "erm, I get way more value out of this than cable and it's a tenth the price, shut up".
>When it comes to Google, I'm more worried that they might just arbitrarily mothball something on a management roadmap whim.
I've been a Project Fi user for 2 and a half years now. This has been my worry every, single, day. Especially since they still owe me like 800$ in statement credits ha.
For your analogy to work you would need to say you are content with Netflix raising their prices >10x (no longer a 10th of cable) because that is what Google just did with their pricing.
Most people I know who stream (ok all people I know) get way more value out of streaming than cable. What is your line on fair pricing for streaming compared to cable, as the service has obvious value to the user?
I don't think anyone, here of all places, would suggest a product requiring engineers and infrastructure be free for commercial use and that the company shouldn't recoup costs.
The good news is, like streaming services, there is competition and pricing will work itself out in the market (assuming no collusion :P)
Netflix raised their prices what they felt they needed to. Google raised their prices what they felt they needed to.
If people don't like it they're more than welcome to go to the competition... which in both cases generally has inferior product.
It looks like this specific change almost entirely inconveniences businesses and not private individuals. They're allowing 28k FREE requests a month which is still beyond generous. That's enough for a small entity to develop a service or product around the service and not only get it working but develop a decent alpha, or extremely modest beta, base of users. Then, just like other businesses, you get to put on your big boy pants and accept the cost of doing business.
Does the power company hand out free power?
Does the water company hand out free water?
Does the phone company let you have free calls?
No. So Google is still allowing a more than fair FREE level of commercial usage and now want to actually monetize their product. If it's adding value to your business, paying the new rates is a cost of doing business. Build it into your pricing, adjust your budget. This is the real world, not Narnia.
I imagine in the most common cases the application is effectively advertising "here are our locations, come to one" and by the point of showing the map you should have already removed a significant number of non-conversions making it VERY fair pricing.
In instances where you are using it to actually build a product around, it's still likely orders of magnitude cheaper than buying, and maintaining, map data yourself. In fact it wouldn't surprise me if one year's cost is only a few percent of what it would cost you to initially buy all of the data and develop software for navigating and hosting it.
People allow free, and cheap, things to make them feel entitled. It's easy to do, it really is, but it's something people need to be more mindful of before freaking out.
All I read in that blog post is "HOW DARE GOOGLE! They want us to pay for a service we use! Pity us! Shame Google for wanting to not operate at a loss! How dare they! How. Dare. They!"
We’re talking of Google Maps the platform and its B2B offering whereas Netflix, cable and phone companies are services for consumers with fixed and reasonable consumer-level monthly subscriptions.
If you haven’t built an app on top of Google Maps, then you pretty much have no idea how much it costs and have zero valuable input you can give.
Also, this isn’t the first time Google is doing this bait and switch. They did it before with App Engine as well, first fooling early adopters in order to gather popularity and then raising prices enough that it made plenty of startups to move off the platform.
Along with other blunders in their products, it makes one wonder how anyone can trust any of their offerings long term.
Too bad the US has lost its anti-trust teeth btw, because what Google is doing is to subsidize its offerings until they get popular, effectively using their monopoly to gain popularity in other markets, thus hurting their competition unfairly.
It isn't a bait and switch. It's introductory pricing. They attracted developers and businesses to a product people essentially weren't using, they let people work with it at or near a loss and now that they have a customer base they are trying to make it profitable.
Yes, they'll lose some of their users that want a free ride. They'll also retain many users that will happily pay under the new pricing scheme because they recognize the value add and find it to be a worthy business expense.
It's no different than companies like MailChimp offering free-for-so-many-subscriber pricing and then requiring you to pay once you reach a threshold they've determined makes you a billable customer. Or a company like Evernote allowing you to save so much data (what a map tile is) and use so many devices a month for free before requiring you to subscribe at one of the paid tiers. Or a company like Pushbullet allowing you to mirror so many SMS messages a month before charging.
If you can't easily handle the pricing change, then you are probably wasting your time using it in the first place and need to discontinue using maps anyway or reassess your own business model.
And there is absolutely no similarity between your MailChimp example and what Google has done in this case. The customer didn't complain about costs rising as the number of users starts to exceed an existing threshold.
That said, I wouldn't be so quick to call for the regulator. All businesses have a responsibility to select suppliers carefully and manage their dependency on any one of them. It appears to me that the value of contracts has been forgotten.
Yet they spend the entire post whining about it.
They also say "Of course, we always knew that as we grew larger, there would be cost to using Google Maps."
This is a bit of “thank you sir may I have another”. 10x price increases? It’s not sustainable? This is just a money grab - they’re not going to give a roadmap for how in the future google maps will be worth 10x the value - it seems to me more of a statement from Google that they have no real competition in the space.
"However, from a regulatory view, monopoly power exists when a single firm controls 25% or more of a particular market. For example, De Beers is known to have a monopoly in the diamond industry."
https://www.intelligenteconomist.com/monopoly-market-structu...
I mean, there's a real cry-me-a-river aspect here. No one has a Google-granted fundamental right to mapping. It's a free product Google released to drive traffic to their own offerings, and which they happen to make available for free for a lot of purposes.
As it turns out, yeah, there's a lot of value we as a society can derive from low cost pervasive mapping. So let's find a way to share the cost and not just whine about Google, no?
Never heard of any drug dealer that did that in my adult life, but I do see a lot of large corporations using that business model.
I ended up rolling my own server (in scheme using sxml) and writing some minimal clients for it (tui, Emacs and web). It is running on a raspberry pi 2 and is currently using about 5mb of memory (the guile runtime is a large chunk of that) and has been down once since I started it 5 years ago (power outage).
Reader was to me the absolute best example of the good old web. Since then it seems like the web became insane with the idea of reinventing UI, which was then forced down our throats for both web and desktop, ruining two paradigms that worked just fine.
I am old,I know.
I don't understand why you rolled your own server. Feedly works great. If you did it because it's a fun project, that's awesome! But it certainly isn't necessary if your goal is just to subscribe to RSS feeds.
So I rolled my own. I will probably port it to use SQL so I can do easy searching when my kids move out :)
I might not have explained my point well but I do think you get what I’m saying.
There are reasonable ways to disagree with Microsoft's policy here, but "no alternatives" and "monopolistic" are just laughably silly.
Your comment completely disregarded the possibility that there's a dominant market position. Which there is. It is hard to compete with free. Ask e.g. TomTom or Microsoft.
"If Google needs to engage in anticompetitive behavior to keep Android profitable/viable, then they weren't ever profitable."
If startups need a giant subsidized operating system for free or else they weren't profitable, they weren't ever profitable.
Do you see how ridiculous that argument is?
>As it turns out, yeah, there's a lot of value we as a society can derive from low cost pervasive mapping. So let's find a way to share the cost and not just whine about Google, no?
Yeah, Google has vacuumed up incredible amounts of mapping data from users and has now jacked up the prices with the lead this gave them. OSM (or something similar) is the way to share the cost. Google just abused their goodwill and used their other power positions to discourage open source. Whining about Google while moving elsewhere is entirely appropriate.
What? Your counter-counterpoint doesn't make sense at. Lots of startups can afford the per seat cost of OSX or Windows. If your business can't recoup the cost of an os per employee then yeah...maybe it's not a worthwhile venture.
On the desktop side of things that only happens because of Linux, otherwise (if guys like Ballmer would have had their way at the end of the '90s - early 2000s) those startups would now be paying hundreds of dollars per Windows license per each machine (and maybe more depending on the number of cores? the sky would have been the limit, the same as Oracle did in their field). And not to mention the server side of things, I'm pretty sure the costs for server OS licenses would have been prohibitive for the vast majority of startups without the alternative free OS solutions.
I mean, kind of, but on the other hand, think about all the companies whose costs are subsidized by having public roads.
I am not saying that mapping should be free, but such price bumps should be communicated better to allow paying customers prepare for changes and alternative scenarios.
And again, just another reminder, that whenever choosing a provider for anything related to your core business - think of an exit plan!
They complain that Maps at new prices would be more than the cost of their infrastructure, when actually their entire startup revolves around this data, and 5k to be able to use an amazing piece of high tech software that is ahead of the competition is..peanuts.
No matter what other business interests and strategies Google follows, there is no right to using such valuable tech for less than the monthly salary of an engineer. I find this incredible entitled.
You see where this argument leads to?
Google does a whole lot more, and can charge whatever they want for it. OSM provides usable solutions the vast majority of users; i’ve Moved to OSM a couple of years ago in everything for privacy reasons and except for the occasional Waze route or verifications, get nothing from google that I can’t get from OSM.
Spot on. I would that if a site / application is hitting Maps' paid tier they can (somehow) monitize that traffic and cover the cost.
But monitization can't help you if / when they pull the plug.
p.s. I sometimes wonder how often Google looks at Slack and regrets mothballing Wave.
* shutting down the service entirely because the user base never grew into customers who actually valued the service
* changing your terms of service to forbid an activity that was previously allowed, because someone discovered a use that messed up the price points and the service owners would rather forbid that than offer a reasonable price point allowing it
* moving to opaquely metered service potentially with apparently arbitrary levels of financial exposure to the client
A big price bump with a few months notice is painful (and I'm glad it's bringing competition), but it tells me they're thinking seriously about how to sustain/develop the product and lets both them and me explore the real value of the service.
When it comes to Google, I'm more worried that they might just arbitrarily mothball something on a management roadmap whim.