It’s a $50/year/user add-on to Google For Your Domain. As written in the New York Times:
The package, called Google Apps, combines two sets of previously available software bundles. One included programs for e-mail, instant messaging, calendars and Web page creation; the other, called Docs and Spreadsheets, included programs to read and edit documents created with Microsoft Word and Excel, the mainstays of Microsoft Office, an $11 billion annual franchise.
They go on to say
By comparison, businesses pay on average about $225 a person annually for Office and Exchange, the Microsoft server software typically used for corporate e-mail systems, in addition to the costs of in-house management, customer support and hardware, according to the market research firm Gartner.
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