Microsoft 365 vs Google Workspace: Which Is Better for UK SMEs in 2026?

This is the most important practical point in the whole comparison, and it's the one people most often get wrong. Microsoft 365 Business Basic is web and mobile only — there is no installed Word, Excel or Outlook. You need Business Standard for the desktop apps. Teams routinely buy Basic expecting desktop Office and are caught out, so flag this before you commit.

Google Workspace, by contrast, has no desktop apps at any tier — everything runs in the browser.

The blunt take: if your team lives in desktop Excel (macros, VBA, complex financial models) or exchanges heavily formatted Word documents with clients, Microsoft is the safer bet. If you're cloud-native and collaboration-heavy, Google's web apps are genuinely better at real-time co-editing.

Google now bundles Gemini into every Workspace tier — and raised base prices roughly 17–22% in 2025 to fund it, so you pay for AI whether you use it or not.

Microsoft only bundles the free Copilot Chat; the full Microsoft 365 Copilot is a paid add-on (around £13.80–£16.10 per user/month) or a pricier Copilot-bundled SKU.

Framed honestly: bundled AI isn't automatically better value. A team that won't use it is still paying for it on Google, whereas Microsoft lets you pilot Copilot with a few power users first and expand only if it earns its keep. If you're weighing up Copilot, our roundup of the 12 feature releases that make Copilot more collaborative, capable and integrated is a good place to gauge whether it fits your team.

Microsoft gives every user a fixed 1 TB (OneDrive) at every tier, plus their mailbox. Google uses pooled storage shared across the whole organisation — 30 GB/user on Starter, 2 TB/user on Standard and 5 TB/user on Plus.

The trade-off: pooling suits teams with uneven usage, because light users effectively lend headroom to heavier ones. But the flip side is that one storage-heavy user draws down the shared pool for everyone.

Both offer a 99.9% financially-backed SLA — around 43 minutes of allowable downtime a month. And both had real outages in 2025: Microsoft suffered a 19-hour Exchange/Teams outage (July 2025) and a global outage (January 2026); Google had an roughly 3-hour global outage (June 2025).

The nuance worth understanding: Microsoft's tightly integrated stack means outages can cascade — email, files and meetings can fail together. Google's more isolated services can limit the blast radius, but offer less integration depth day to day.

This is where an MSP earns its keep — continuity planning, not just picking a vendor.

Both platforms are UK GDPR-compliant with the major certifications (ISO 27001, SOC 2 and more), MFA, encryption and DLP at higher tiers. So far, so even.

The standout point is data residency. Microsoft can host core data in UK data centres. Google Workspace Business tiers can only pin data to US or EU regions — there's no UK-specific option. For regulated SMEs, that difference is often decisive.

It's also worth knowing that Microsoft 365 Business Premium bundles Intune device management, Defender for Business and conditional access — a security stack that would cost far more bought separately. If you'd buy those anyway, Premium is effectively “free” security.

Market share depends entirely on how you count. By registered domains Google edges ahead (around 50% vs 45%); by enterprise seats and revenue Microsoft dominates. Tellingly, 64% of organisations run both — worth normalising if you feel you have to pick a single side.

In UK SMB reality, most businesses default to Microsoft on the strength of Windows and Office familiarity, while Google skews towards startups, cloud-first businesses and education.