I wonder if the cause of this is the support costs required for the free accounts? Obviously personal GMail is plug-and-play, but for someone who can't spell DNS, setting up a domain account was never quite drop-dead-simple enough. I suspect the goal here is to create a barrier to entry and prevent the inevitable support load of free users.
There was an excellent post about this a while ago, where a developer reported much better treatment from users after charging a token fee for their app.
As a final thought, maybe Google is catching on to the 'charge what something is worth, not what it costs you' way of thinking. Hosted email solutions for enterprise aren't free, and it seems like Google has realized the real value of their product. Also, ~$4/seat/month is pretty well in line with this kind of SaaS offering.
I doubt the support costs were very much. As with all things Google other than being an adsense buyer, support was basically "send us an email and we'll respond with a robo-faq that may or may not have anything to do with your question".
And Google Apps was actually quite easy to setup, partly because Google documented it pretty well but mostly because many DNS providers would basically do a one-click Google Apps setup automatically for you.
Given that there were people who would try to use the free version for their business, and then kvetch (on HN and/or other major technology blogs) when their account was hijacked and they lost business critical access and couldn't recover quickly because they didn't have the 24/7 phone support, it might actually be better that the free version is getting sunset....
Frankly, I read the blog post and I have Google Apps for Business at work (and use the free version for my domain), and I missed this. It's kind of buried in the middle paragraph, and I don't remember it being trumpeted on the upsell page when I signed up.
If it's anything like the Play Store phone support, it's basically a placebo so you feel instantly gratified, while the CSR sends an email to the real support team ( with ~48 hour turn-around).
This is likely primarily an opportunity to upsell other services - great opportunity to chat with people, make a connection, build a relationship, etc..
There was an excellent post about this a while ago, where a developer reported much better treatment from users after charging a token fee for their app.
As a final thought, maybe Google is catching on to the 'charge what something is worth, not what it costs you' way of thinking. Hosted email solutions for enterprise aren't free, and it seems like Google has realized the real value of their product. Also, ~$4/seat/month is pretty well in line with this kind of SaaS offering.