Workplace by Facebook increases monthly prices

Facebook is overhauling its pricing menu for the Workplace collaboration app in a move that could increase monthly bills for many businesses.

Facebook currently has two pricing tiers for Workplace: free and $3 per user, per month. Soon, the vendor will offer three plans: free; $4 per user, per month; and $8 per user, per month. Launched in 2016, Workplace by Facebook has more than 2 million paying users. 

Facebook will begin charging for each person a customer invites to the app, rather than billing businesses for only the workers who actively use the app in any given month. Companies will pay more under that setup, which Facebook said it adopted to eliminate variability in monthly bills.

But a new pricing tier for so-called front-line workers could potentially offset the cost of higher monthly prices. Facebook will grant licenses for $1.50 per month per employee for hourly workers who spend most of their time away from a desk, such as baristas, hospital staff and warehouse and utility workers.

Workplace by Facebook has gained traction among large organizations with a high proportion of non-office workers, including Walmart, Domino's and Starbucks. Cloud collaboration companies are increasingly targeting non-office workers, whom the vendors have historically excluded from their internal communications apps. Microsoft, for example, lets managers schedule shifts and workers swap them in Microsoft Teams.

Facebook's new pricing plans for Workplace will take effect for new customers in phases, beginning this month in New Zealand and parts of Asia. Existing paying customers will be charged based on today's prices through the end of September 2020. Facebook will continue to offer the product for free to nonprofits.

Workplace Essential, the new free plan, will place limits on two aspects of the app that, as of now, are unlimited for free subscribers: groups and storage. Each user will have 5 gigabytes of storage, and each organization will get up to 20 groups.

Workplace Advanced, the $4 plan, will also limit storage, to 1 terabyte per user, but will place no limits on groups.

Workplace Enterprise, the $8 plan, will offer unlimited storage and groups and will give subscribers early access to new features. Facebook will also contractually promise to respond to customer support inquiries from Enterprise subscribers within four hours.

Front-line workers on Enterprise accounts will have permission to use the web and mobile apps, although businesses will have the option of limiting their use to the mobile app alone; front-line workers linked to Advanced plans will have access to only the mobile app. Subscribers of both pricing tiers will be able to block front-line workers from creating groups and accessing Workplace outside of certain hours.

Workplace by Facebook will still be a bargain relative to competing apps. Slack charges monthly user fees of $6.67 and $12.50 for its standard and plus plans, respectively, and offers an enterprise edition at a negotiated price. Cisco charges between $13.50 and $26.95 per meeting host, per month, for its Webex video and messaging bundle.

Facebook reported revenue of nearly $56 billion last year, a figure so large that the company doesn't need Workplace to generate profit in the short term. Nevertheless, the company appears serious about its push into businesses, said Wayne Kurtzman, an analyst at IDC.

"Workplace's prices were (and are) below market prices, in part, due to their ability to use shared engineering resources with Facebook," Kurtzman said. "They can afford to go to market with low prices to gain adoption, and then leverage those brands to grow market share and profits."

Facebook's decision to add an enterprise subscription tier could be a sign the social media giant is finally seeking a return on investment after charging businesses relatively little for the product since its launch.

With a user interface that mimics the consumer app, Workplace by Facebook supports instant messaging and video conferencing and integrates with more than 50 business tools, including ADP, Office 365, Dropbox and Google Drive. Several early adopters of the product told TechTarget last year that they were using it primarily as a hub for directory information and company announcements, similar to an intranet.

According to Facebook, the Workplace app and the consumer version of Facebook run in separate clouds. The company is also quick to point out that Workplace does not rely on paid advertisements, a business model that has come under fire following a string of privacy lapses by Facebook. Earlier this month, the Federal Trade Commission reportedly voted to fine Facebook $5 billion for mishandling the personal information of its users.