Modern offices need office applications. Your employees need to write and receive emails, they need calendars to coordinate appointments, they need a word processor, a calculator, a presentation slides builder, and spreadsheets depending on the task at hand.

Traditionally, many companies have used Microsoft Office tools such as Outlook, Word, Excel, and PowerPoint, just to name a few. These companies would purchase one of an array of license packages based on the size of their organization and their needs. The maintenance costs that come with this type of on-premise IT infrastructure, along with its limited capacity for collaboration (mobile or with external parties) are leading more companies to take the plunge into the cloud.

Office solutions in the Cloud

Large corporations such as Amazon, Microsoft and Google have their own large data center infrastructures. While they do need these data centers for internal operations, they're also increasingly making them available to customers in the form of cloud services.

Using a cloud infrastructure has many benefits. Depending on the size of your company and its requirements, cloud infrastructures can grow dynamically without having to buy and set up expensive hardware. You also no longer have to worry about server security, as the data centers of the large providers already have the very strictest security protocols.

SaaS (Software as a Service) is a part of cloud computing that gives you these office applications, which are necessary for everyday work, as cloud services. If you come from a classic Microsoft on-premise environment and now you're thinking of transferring to the cloud, it's a good idea to take your time when making such a decision. It's not smart to simply abandon Microsoft and jump head first into the cloud. Nevertheless, let's take a closer look at Google's cloud based alternative to traditional Microsoft Office.

With G Suite, Google has been developing an alternative office package that serves the needs of companies with their everyday work. You can use Gmail for emailing, Google Calendar for appointments, Docs for word processing, Sheets for calculations, and Slides for presentations, just to name a few.

Unlike Microsoft's Office 365 cloud solution, G Suite tools have been designed specifically for the cloud from the ground up, rather than from a traditional desktop application. You can see this represented in many of G Suite's features, especially with regard to collaboration. (You can read a basic comparison overview here.)

Cost comparison

At first glance, cloud solutions may appear to be more expensive than traditional on-premise licenses. This can be misleading. Cloud services tend to charge monthly and annually per user, while you may have only renewed your traditional software licenses every few years.

In order to make a more honest comparison, let's first consider what all a cloud subscription gets you. You're not simply purchasing a software license. You don't have to pay for any of the hardware, maintenance, and operation costs of your own infrastructure. To see for yourself, Google offers an online tool to calculate ROI (Return on Investment).

Now that we've discussed the cost saving potential that cloud based solutions have to offer compared to their on-premise counterparts, the next question is how much the cloud vendors actually cost.

Microsoft and Google cloud pricing options

Microsoft offers its cloud solution Office 365 at seven different price points. They put these into two major categories: Business and Enterprise. The business category consists of the Business, Business Essentials and Business Premium plans. The Enterprise category includes the ProPlus, E1, E3 and E5 plans. The least expensive plan (Business Essentials) costs €4.20 per user/month, and the most expensive (Enterprise E5) costs €29.50 per user/month.

Google divides their office alternative G Suite into only three different options: Basic, Business and Enterprise. Basic costs €5.20 per user/month, Business costs €10.40, and Enterprise is €23.

The plans offered at these various price points differ mainly in terms of the number of applications they have, their overall functionality, cloud storage space availability, and security. With Office 365, the different plans also offer different options with regard to whether the tools can be installed locally or are limited to being available only as a cloud service.

Cloud storage space

Microsoft offers a terabyte (TB) of cloud storage at any Office 365 rate. Of course, you can always purchase additional storage, which is likely to be necessary depending on your company, but be careful as it can quickly translate into unforeseen high additional costs.

There are three levels of cloud storage within Google G Suite. The basic plan only includes 30 GB of cloud storage and the business and enterprise plans also include one TB for up to four users. However, as soon as we create a fifth user as a customer, Google grants us unlimited storage space. That's remarkable!

Legal certainty

Archiving and discovery functions are another important requirement. Without them, you'd be taking considerable risks and would likely face compliance problems or possibly even legal difficulties. These features are available at Microsoft only in the Enterprise plans E3 (19,70€) and E5 (29,50€). Google already offers these kinds of functions starting from their Business plan (10,40€).

Conclusion: G Suite is an affordable office alternative

While the costs for switching to a cloud solution may seem higher at first, these solutions quickly pay for themselves as companies trim away unnecessary hardware infrastructure and associated maintenance costs. Even if the different rates of the two cloud based office providers Microsoft and Google are not completely comparable, Google's G Suite is, simply put, the more affordable office alternative. Microsoft offers you a wider range of plans, but the plans that actually meet the needs of a typical company are significantly more expensive than the corresponding G Suite business plan. Even in the area of storage space, the costs associated with Microsoft Office can quickly get out of hand.

Forrester study on the economic impact of G Suite

The market research company Forrester recently conducted a study in which it examined the ROI of G Suite in detail and examined real-life examples.

The Forrester team examined these aspects, among others:

• Revenue growth
• Cost savings
• IT Efficiency and Productivity
• Significant ROI

Your partner for G Suite and Google Cloud solutions

Are you interested in modern business collaboration using Google software as an office alternative? Contact us if you have any questions or would like to know more: We are an official Google Cloud Partner and would be happy to advise you on the introduction, licensing and productive use of Google G Suite!

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Further information

Why large companies and organizations are choosing Google G Suite
Teamwork using Google G Suite for businesses and freelancers
Can you compare Google G Suite and Microsoft Office 365?
Comparing Microsoft Office 365 and Google G Suite: Problems with Excel Online