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Typical MS BS...like how they artificially limit the number of Tcp connections unless you buy the server editions.

Or like how you bought that vista home basic version of windows and it didn't even have administrator tools enabled.

While it might seem low, this isn't really news. Google Apps has a per account daily sending limit of... 500 recipients: https://www.google.com/support/a/bin/answer.py?hl=en&ans...

And it's been that way for at least three years (I had written some code in 2008 to use multiple Apps accounts to send notifications for a web app in round-robin fashion)

Also, the docs at Google are confusing too. They make a distinction between sending limits for Google Apps (500/account/day) and Google Apps for Business (3000/account/day). I've used Google Apps (for Business?) for several years and don't know the distinction between the two.
Plain Google Apps is the free version, Google Apps for Business is the pay for version.
This is to counter spam and malware, done the Microsoft way (like Outlook not being able to receive attachments with certain filename extensions):

"Michael Atalla, Director of product management for Exchange Server and Exchange Online, confirmed the limitation [...], arguing that it’s a necessary anti-spam measure:

'Every online service provider must limit and constrain its service based on limitations such as the amount of disk space currently in its datacenters or bandwidth currently available and also enforce behavioral thresholds which prevent inappropriate use of the service by malicious users or criminals. This is true for any form of web-based service.

In the world of email, one of the thresholds that must be enforced is the amount of email that is sent through the system by any one user or organization in order to combat spam, mass-mailing worms & viruses.'"

"Neither should consultants who recommend and deploy a service [be penalised]"

In this case I'd suggest they're being penalised for not reading the limitations before recommending a product to their client, and not double-checking that the service met the client's requirements.

I'll second this, it's the kind of thing that you should be looking at, or asking a representative of the company who's selling the software. I'm glad this post appeared, my company was contemplating Office365 as an EDMS with extra features... but if we can't send emails to more than 500 people (or even 1500) per day, it's utterly worthless to us. Sent it to my boss, now he'll think I did some deep research for him :)