Microsoft 365 vs Google Workspace: Which Is Better for Your Small Business?

The short answer

If your business relies heavily on desktop Office applications (Word, Excel, PowerPoint), works in industries where Microsoft files are the standard, or has complex email and compliance requirements, Microsoft 365 is likely the better fit. If your team is comfortable working in a browser, values real-time collaboration, or is starting from scratch with no legacy Microsoft dependency, Google Workspace is faster to set up, easier to manage, and often better value.

What is included in each platform?

Microsoft 365 Business Basic (from £4.90 per user per month) includes cloud versions of Office apps, Exchange email with a custom domain, Teams for video and messaging, SharePoint for file storage, and 1TB of OneDrive storage. Higher tiers add desktop app installs, advanced security, and compliance tools.

Google Workspace Business Starter (from £4.14 per user per month) includes Gmail with a custom domain, Google Drive (30GB per user), Docs, Sheets, Slides, Google Meet for video calls, Google Chat, and Calendar. Higher tiers increase storage and add management controls.

Real-time collaboration

Google pioneered real-time collaborative editing - multiple people can work in the same document simultaneously with changes appearing instantly. Microsoft has improved significantly in this area, but Google's implementation remains smoother for teams that collaborate heavily on documents and spreadsheets.

File compatibility

If you regularly exchange files with clients, accountants, solicitors, or suppliers who use Microsoft Office, Word and Excel format compatibility matters. Google Docs and Sheets can open and export Microsoft formats, but formatting does not always survive the conversion perfectly. Microsoft 365 is the safe choice if file format compatibility is important.

Email: Outlook vs Gmail

This often comes down to personal preference. Outlook is more powerful for complex email management, calendar scheduling, and integration with other Microsoft tools. Gmail is cleaner, faster to search, and more intuitive for users who do not need advanced email features.

Cost comparison for a 5-person business

At the entry level, both platforms cost roughly £20-25 per month for five users. The real cost difference appears when you factor in what your team actually needs. Microsoft's desktop apps (the full installed versions of Word, Excel, and PowerPoint) require a higher-tier plan at around £9.90 per user per month. If you only need browser-based access, both platforms are comparably priced.

Which should you choose?

Choose Microsoft 365 if: your industry has standardised on Microsoft files, you need powerful Outlook features, or you already use other Microsoft products like Azure or Dynamics. Choose Google Workspace if: you want simplicity, your team is young and browser-comfortable, real-time collaboration is important, or you want the lowest cost of entry with the least complexity to manage.