Will Gmail price hike cripple India’s MSME industry?
New Delhi, August 17: India has inaugurated its Amrit Kal, but is the country’s MSME sector on the brink of collapse? More than 7 million MSMEs or micro, small and medium enterprises exist in India and are rapidly adopting digital forms of communication for business operations and even marketing. So what is the hustle about?
MSMEs in India depend on Google services, such as Gmail and DropBox for business uses and pay service fees to the multinational for the same. Various MSMEs and allied companies have said that Google has increased its service fees to an exuberant amount in less than a year.
Hans India spoke with Mr. Bhagwat Patel, Partner at Siddhi Group of Companies, about the impact of Google product price hikes on his business in a year. Mr. Patel, a mechanical engineer by profession, established his company, Siddhi Engineers Aluminum Precision Tube in 1988 and has been its technical director for over three decades. The company manufactures engineered products for different segment applications such as industrial engineering, aerospace and defense, telescopic mast, waveguide for satellite communication, alucore cot (power industry cotton spinning), automotive components, among others.
The company’s manufacturing unit is based in Ahmedabad and has worked closely with the Defense Research and Development Organization (DRDO) and Bharat Electronic Limited. The company also manufactured alloy tubes for Akash Missile, a medium-range mobile surface-to-air missile system developed by the DRDO. Like many MSMEs, Mr Patel’s company has also embraced the digital space to avail necessary services such as cloud computing. Electronic mail or email is the backbone of a business’s business operations without which it may not be able to function effectively.
“My (correspondence) business operates 100% by e-mail… You know very well that every business, whether small or medium, operates by e-mail exchange. I receive orders for materials by mail. We we receive our payment receipt by email. do not receive physical mail in a courier. The digital world is the essence of everyday life, “said Mr Patel.
Mr Patel explained that Google Inc has raised the prices of its services. To break it down further, the MSME company has to pay a per person fee on Gmail through which a registered employee can use up to 30 GB of email space at the price of Rs. 1,500 which was later increased to Rs. 2,500 in 2020. For an additional 100 GB space, Google would charge an additional Rs. 1,300 per person. So, if a company needs 50 to 60 Gmail accounts for its employees, Rs. 2,500 rupees (per user) would be charged by Google, and those who need additional cloud storage, the company will have to incur expenses. additional Rs. 1,300 to expand usage up to 100 GB for each ID, making it a total of Rs. 3,800 for 130 GB of storage space.
But now Google has changed its plan and instead of offering 100GB of space, now it allocates 1TB (terabyte) in the additional plan at the price of four times. So, for 2TB space, a company will have to pay up to Rs. 10,000 per person or per Gmail ID Gmail charges are not flexible and every employee’s Gmail ID will be upgraded regardless of usage and its needs.
Mr. Patel’s company in previous years paid up to Rs. 1,00,000 to Google for Gmail services but is now forced to pay up to Rs. 4-5 lac rupees to avail the service. Mr Patel told Hans India that over time, the company’s digital spend has increased and constitutes a significant portion of the overall cost of the business.
“Of the total digital investment, I think email services made up about 7-8%. After an increase in the cost of email services by Gmail, it’s now up to 30%, and it’s going to be an unbearable cost We have thought about another alternative,” explained Mr. Patel.
Patel said all mail received and sent is through electronic channels. The company’s CTO also said that one of its managers was having major issues with his Gmail ID because Google was limiting storage space. The email id couldn’t receive a match beyond that and the company was forced to buy more cloud space to get the inbox and outbox to work.
India’s MSME segment has been hailed as the backbone of the country’s economy, but given the circumstances, the compulsion to spend more budget to keep the digital mode of communication open may harm their business. On Thursday, an open letter to Google was published by Vishal Shah, Founder and CEO of Synersoft Technologies, to highlight the plight of several MSMEs in India, including Mr Patel’s company, due to the sudden rise in prices for services in India. Google line. The open letter was also copied to the Competition Commission of India, Ministry of MSMEs, IT & Broadcasting, Science & Technology, Industry & Commerce and finance.