Before you soil your trousers, those domains which have already been registered with a free version of google apps will continue to be free. That doesn't make the news any less devastating to those of us whom have taken advantage of the free service for resale/value-added hosting:
Hello from Google,
Here's some important news about Google Appsbut don't worry, there's no need for you to take any action. We just want you to know that we're making a change to the packages we offer.
Starting today, we're no longer accepting new sign-ups for the free version of Google Apps (the version you're currently using). Because you're already a customer, this change has no impact on your service, and you can continue to use Google Apps for free.
Should you ever want to upgrade to Google Apps for Business, you'll enjoy benefits such as 24/7 customer support, a 25 GB inbox, business controls, our 99.9% uptime guarantee, unlimited users and more for just $5 per user, per month.
You can learn more about this change in our Help Center or on the Enterprise Blog.
Thank you for using Google Apps.
Director, Google Apps
Thanks Clay. You're a dick. $5 per user per month is preventatively steep when taken into consideration the fact that most GoDaddy resellers can deliver 10 accounts with unlimited storage for $2.50 per month all together.
Say Alice runs a temp agency. She has 30 employees and all of them need e-mail addresses. If Alice wants to use Google Apps for her company's e-mail service provider she will pay $150 per month ($1,500 if she pays yearly) or 38 times what her shared website hosting plan costs.
The downside to third party mail providers like GoDaddy is they are notoriously oversold and dripping with spammers. That can affect your mail's deliverability through collateral damage (RBLs, subnet reputaion, etc.).
The other major point in Google's favour is their first rate spam filter. Being the unfortunate administrator of a few inherited, prehistoric mail servers nothing makes my skin crawl more than the thought of making a bunch of e-mail servers and in-sourcing all of my e-mail operations. Over time, in dealing with the prehistoric mail servers, it has become necessery to put a spam firewall in front of another spam firewall just to keep the first one from overloading. Maintaining even a modern e-mail system is similarly an arms race.
I have tried to sell clients on the concept of $5/user/month e-mail accounts since Google Apps began and they all look at me like I'm an idiot. If the choice wasn't between free and obscene I (and I would assume many others) would not have taken advantage of the system in quite the proportion that we did.
The free ride is over. For now. I'm sure it won't take long for the next big thing in free e-mail to make itself evident - and when it does Google can take a hike.