Facebook plans Workplace price hike, adds new Enterprise option
- 17 July, 2019 02:49
Facebook today unveiled pricing changes for its Workplace enterprise social network, adding a new tier aimed at larger organisations as well as “add-on” options to encourage deployments to frontline workers.
Workplace, launched at the end of 2016, now has more than two million individual paid users, including 150 larger customers who have deployed the app to more than 100,000 workers. Among those customers are the Royal Bank of Scotland, Walmart and Nestle.
The new Workplace Enterprise tier will cost US$8 per user per month, is expected to be available beginning Sept. 2 and is designed to cater to large organisations.
It offers faster support response, early access to new features and unlimited storage. It will sit alongside Workplace Advanced, a paid option (at $4 per user per month) with certain restrictions, and Essential, a free version aimed at teams and small businesses testing out the software.
The new structure will replace the two existing Workplace tiers introduced at the start of 2018, which includes a free version and the full-featured Premium tier, currently priced at $3 per user per month. The arrival of the Advanced tier means higher prices for those customers that use it, although Facebook said the pricing changes don’t take effect until Oct. 1, 2020.
The pricing changes coincide with a shift to a new licensing model that Facebook claims will offer more predictability. Customers currently pay only for users that interact with Workplace on a regular - i.e., monthly - basis.
Going forward, customers will instead pay for “deployed” users, meaning they determine how many licenses they want to pay for; that number can be changed as needed.
Julien Codorniou, vice president of Workplace, said the licensing changes will bring Workplace into line with industry standards.
“Our customers told us that between flexibility and predictability, predictability was more important,” he said. “They don't want to have a bill that changes every month, it doesn't help the finance department to understand the investment that they make in Workplace.”
Angela Ashenden, a principal analyst at CCS Insight, agreed that the new pricing structure will likely appeal more to large companies that want predicable costs. Smaller businesses may be more concerned by the price increase however.
“The overall pricing changes signify a maturing in Facebook’s strategy with Workplace, as it has a large and established enough customer base to have a clearer picture of the packaging and pricing that will meet the expectations of customers,” said Ashenden. "There will inevitably be some customers that push back, but overall I think it will be well-received by the market.”
Frontline worker add-ons
The other major change involves new add-ons for frontline workers that target employees in the retail, hospitality and healthcare industries where access to a corporate email account may not be a given.
A frontline worker ‘add-on’ will be available for both the Advanced and Enterprise payment tiers, providing access to Workplace for $1.50 per user per month. On the Advanced tier, frontline workers will be granted access to Workplace features on mobile device, while those on Enterprise subscriptions will be able to use the app on desktops, too.
Targeting frontline workers is a “huge opportunity” for Facebook, said Ashenden.
“For me, the frontline worker add-on is very interesting, because it reinforces Facebook’s growing focus on frontline workers and connecting everyone across an organization, not just desk-based employees,” she said.
“The reduced cost of frontline user pricing – particularly in comparison to the Workplace Enterprise pricing – will make companies think more about the opportunities for reaching this largely unsupported group.”
Existing Workplace Premium customers will be migrated to Advanced status in September. Workplace Standard customers will be migrated to Essential when it launches next year.
Facebook offered more detailed information about the changes and how companies would be affected in an online FAQ.