Wait, Google Apps for Business is a “real” business?

Updated: Google Apps for Business appears to be gaining critical mass. Google(s goog) will now charge for workgroups of 10 people using Google Apps, although small workgroups already using the cloud-based productivity tools can keep using them for free. When Google launched the offering in  2006 as a way to build an enterprise software business, it was free for up to 200 users. That limit has been reduced several times over the years to 10.

This change indicates that Google is treating Apps for Business as a real business  albeit a tiny one compared to the company’s huge search operation. According to a Wall Street Journal report  the company sold $1 billion worth of Google Apps for Business last year — a contention Google would not confirm. That amount is itty bitty compared to the multiple billions Microsoft(s msft) earns on its Office juggernaut annually but is still a respectable number if true. For its FY 2011, ending last June, Microsoft Business Division — which includes Office —  generated $21.99 billion in revenue.

At Google I/O in June, Google said it had 5 million Google Apps business customers but did not break out paid versus unpaid.

The news of changes to the Google Apps sales plan was posted on the Google Enterprise blog late Thursday. According to the post, people wanting to keep using freebies can create personal accounts for Gmail and Google Drive. But even small businesses may opt Google Apps for Business for $50 per user per year, in return for which they get phone support, 25 GB of storage and service level agreements of 99.9 percent.

It’s unclear what impact, if any, Microsoft’s cloud-based Office 365 is having on Google Apps adoption. Update:  And interestingly, IBM(s ibm) which bought Lotus, along with its Office-wannabe SmartSuite years ago, is apparently back in the game, according to InformationWeek. 

IBM SmartCloud Docs, according to that story is:

“available for $3 per user, per month, as an add-on to SmartCloud Engage Standard and the IBM Connections networking platform. IBM also added new features, such as enhanced presence awareness, to its SmartCloud for Social Business service.”

Note to IBM:  SmartCloud Engage Standard? SmartCloud for Social Business? Let’s do something about these names or neither Google nor Microsoft will have much to worry about.