Google India has reduced the prices of its online business applications for small and medium businesses (SMBs), even as it looks to stem growing competition from players such as Zoho Corp, potentially sparking a price war between Google, Salesforce and other players.

The Internet search giant has effected a 45 per cent price reduction in its ‘Google Apps for Business’, which include solutions such as Google Drive, Docs, Sheets and Slides.

This move comes a few months after the company killed its free version of the software suite for organisations with up to 10 employees. “New and existing customers in India will now pay Rs. 150 per user per month if they are on the flexible plan, and Rs. 1,500 per user per year on the annual plan,” Judy Chang, Product Manager, Google Apps for Business, said in a company blogpost.

“India is home to around 47 million small businesses, yet only one per cent of these businesses are online. We hope that by making Google Apps more affordable, more small businesses in India will be able to access a business-ready package of communication and collaboration tools,” Ms. Chang added.

Zoho Corp, on the other hand, is looking to woo SMBs through better marketing and free plans.

The company recently revamped its pricing plan for Zoho Mail, making it free for up to 5 users now.

“We believe we have a very competitive pricing model. While we have no immediate plans to change our prices…a reduction of 45 per cent in prices by Google is significant. We have also ramped up our marketing efforts,” Aravind Natarajan, a Zoho spokesperson, told The Hindu.

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