Microsoft 365 vs Google Workspace for Small Business

For a small business, Microsoft 365 vs Google Workspace starts as a tie. Microsoft 365 Business Basic and Google Workspace Business Starter both cost $7 per user per month on a one-year commitment. Above the entry tier the two suites split on price, on what the contract locks in, and on which plan first includes retention for mail and files.

What each tier costs and includes

Microsoft sells three business tiers, each priced per user per month, paid yearly: Business Basic at $7.00, Business Standard with Copilot at $23.50 and Business Premium with Copilot at $32.00. Each also comes in a no-Teams version: Basic at $5.40, Standard with Copilot at $20.30 and Premium with Copilot at $28.80. Google's three are Business Starter, Business Standard and Business Plus, at $7, $14 and $22 per user per month with a one-year commitment, or $8.40, $16.80 and $26.40 without one. The one-year commitment saves 16%.

Two narrower Microsoft products sit beside the tiers. Microsoft 365 Apps for business costs $10.00 and covers the desktop apps without chat or calling, and Teams Phone Standard is a $10.00 add-on. Existing customers on an eligible business plan can also buy the Copilot Business add-on. Between July 1 and December 31, 2026 it starts at $18.00 instead of $21.00, and the discount applies to the first year only. Standard and Premium already carry Copilot, and some AI experiences are billed on usage, with charges on top of the licence fee.

Per user per year, Google costs $84, $168 and $264 on the annual plan, and $100.80, $201.60 and $316.80 on the Flexible Plan. Multiplying Microsoft's paid-yearly rates by 12 gives $84, $282 and $384, or $64.80, $243.60 and $345.60 for the no-Teams versions. Only the entry tiers line up. Above them the suites are not equivalent in scope, so the $114 gap at the middle tier and the $120 gap at the top do not compare like with like. Microsoft Standard and Premium bundle Copilot. Premium also adds Intune Plan 1, the full Microsoft Entra ID in place of the free version, and Defender for Business, which costs $3.00 per user per month on its own. Every Google tier includes Gemini: Starter has the Gemini assistant in Gmail and Gemini chat, and Standard and Plus extend the assistant to Docs, Meet and more. Plus adds advanced endpoint management. The Microsoft pricing page does not list a price for Standard or Premium without Copilot.

Storage and apps also differ at every tier. Each Microsoft business tier comes with a 100 GB primary mailbox and 1 TB of OneDrive per user. Basic and Standard add a 50 GB archive, and Premium a 1.5 TB archive. Basic runs web and mobile apps only, while Standard and Premium install on up to 5 PCs or Macs, 5 tablets and 5 phones per user. Google pools storage across the organisation: 30 GB per user on Starter, 2 TB on Standard and 5 TB on Plus, and the plan page gives no separate mailbox size. Its tiers step up on video meetings, from 100 participants on Starter to 150 with recording on Standard and 500 with attendance tracking on Plus. Every Google tier includes custom business email, and Workspace includes interoperability with Microsoft Outlook.

Contract terms when headcount changes

Microsoft offers three ways to pay: a monthly commitment paid monthly that you can cancel at any time, an annual commitment paid monthly, and an annual commitment paid upfront. The pricing page prints only the paid-yearly rates and does not list the monthly-commitment price for Basic, Standard or Premium, so get that figure before you budget for month-to-month licences. An annual commitment paid monthly may incur penalties if you cancel early. One paid upfront gets no refund if you cancel before the term ends. Every paid Microsoft subscription has a 7-day window in which you can cancel for a prorated refund.

On Google's Flexible Plan you are billed monthly, can add or remove users at any time and can cancel without penalty. Billing is prorated: a user added on April 1 and deleted on April 15 is charged for half a month. Suspended users on the Flexible Plan are charged at the same rate as active users, so suspending a leaver's account does not stop the charge.

Google's Annual/Fixed-Term Plan is stricter. You can reduce licences only when the contract renews, and if you cancel before the renewal date you are charged for the remaining balance of the contract, with no refunds. The plan can be billed monthly or yearly. If you pay yearly, Google charges the full commitment at the end of the first month. You can switch from Flexible to Annual at any time in the Admin console with an upfront annual payment. Going from Annual back to Flexible is allowed only during the free trial or at renewal. Multi-year plans go through Google's sales team.

Google's free trial lasts 14 days, and the first charge comes at the start of the month after the paid subscription begins. Google gives at least 30 days' notice of a price increase. Microsoft's trial lasts one month, needs a credit card and converts to a paid subscription when it ends. After a Microsoft cancellation, admins keep access to the account's data in a limited-function account for 90 days. Both suites cap business plans at 300 users: Microsoft across its family of business plans, and Google on Starter, Standard and Plus.

Where retention, eDiscovery and DLP start

Counting only the licences a plan includes, retention for mail and files starts at the third tier on both suites, with exceptions on each side. Among Microsoft's business tiers, only Business Premium licenses organisation-wide, location-wide and include/exclude retention policies, and it is also the only business tier listed for creating retention labels. The E3 and E5 enterprise plans license both. Retention policies for Teams chats and channels are licensed lower, on Basic, Standard and Premium, but for some of the listed plans the retention or deletion period must be more than 30 days, so confirm whether your plan carries that condition before relying on it. For Exchange mailboxes, an Exchange Online Plan 2 or Exchange Online Archiving licence also covers retention policies. Premium is the only business tier with the 1.5 TB archive mailbox.

On Google, Business Plus includes Vault to retain, archive and search data. The Starter and Standard plan lists do not include it. Vault is an information governance and eDiscovery tool that lets an organisation retain, hold, search and export users' Workspace data. Google also bills Vault as a separate subscription an admin can add, but the billing page gives no price and does not say which editions can add it.

The two third tiers differ on legal search. Google bundles eDiscovery into Business Plus. Microsoft's eDiscovery (Standard) lets you create cases, assign eDiscovery managers to them and place holds on content relevant to a case, but Business Premium is not among the licences listed for it. Admins and users working with eDiscovery cases need a Microsoft 365 Enterprise E3 or E5 licence. A firm on Business Premium can therefore keep mail under a retention policy and still need enterprise licences to run a case against that mail.

DLP goes the other way. Microsoft includes DLP for Exchange, SharePoint and OneDrive and Message Encryption in Business Premium as well as E3 and E5. Google puts Data Loss Prevention and S/MIME encryption in Enterprise, which has no published price, so the two cannot be ranked on DLP cost. All three Microsoft tiers get anti-malware and spam filtering with Exchange, and Premium adds Defender for Office 365 Plan 1 on top of it. All three also include Purview Audit (Standard) for logging and searching audited activity, and the enterprise plans add more compliance and security management.

Prices for registered nonprofits

Both vendors give eligible nonprofits a free edition. Microsoft grants Microsoft 365 Business Basic free for up to 300 users. Granted licences are only for paid employees and unpaid executive staff, so volunteers need the discounted offers, and Microsoft expects nonprofits to keep 85% of granted licences in active use. Google Workspace for Nonprofits costs $0 and includes 150-participant video meetings and 100 TB of storage shared across all users. Its plan list does not include Vault or retention. On Google the first nonprofit offer that lists them is Business Plus.

The tiers that carry retention are discounted too. Microsoft 365 Business Premium costs nonprofits $5.50 per user per month, paid yearly. Google Business Plus costs nonprofits $6.16 per user per month on a one-year commitment, or $7.40 billed monthly, and includes eDiscovery, retention and Vault. On annual terms that comes to $66 a year for Premium and $73.92 for Plus. Google's discounted Enterprise Standard and Plus, which carry DLP, are listed at 70%+ off standard pricing, but the page does not list a price.

For Microsoft eDiscovery cases, the enterprise plans have nonprofit prices: E3 at $9.75 and E5 at $24 per user per month, paid yearly. Microsoft also sells a Purview Suite add-on for Business Premium at $4 per user per month, paid yearly, covering Insider Risk Management, Information Protection and Governance, and eDiscovery and Audit. A combined Defender and Purview add-on costs $6. Microsoft's nonprofit offers do not say whether the Purview add-on meets the E3 or E5 requirement for eDiscovery cases, so confirm that with Microsoft before buying it for that purpose.

None of these prices apply until the vendor has validated the organisation. Microsoft's third-party validation supplier checks each registration, which can take up to seven business days. Google activates its nonprofit products once it has verified the organisation's eligibility, and caps the free edition and the discounted Business Standard and Plus at 2,000 users.

How to choose

If the firm needs email, files and video calls but no retention rule, compare the $7 tiers. Microsoft Basic gives a 100 GB mailbox, a 50 GB archive and 1 TB of OneDrive, with no desktop installs. Google Starter gives 30 GB of pooled storage per user and 100-person meetings. Staff who work in desktop Word and Excel push you toward Microsoft Standard, or Apps for business at $10.00. Staff who work in the browser fit Google Starter.

If a regulator, client contract or insurer requires you to hold mail and files, price the third tier. That is $264 per user per year for Google Business Plus on the annual plan, against $384 for Microsoft Business Premium with Copilot or $345.60 for its no-Teams version. Part of Premium's price pays for Copilot and Defender for Business, so subtract what those are worth to you before comparing. Then check the second tool you need. Google Plus includes eDiscovery and Vault, while Microsoft's eDiscovery cases need E3 or E5 licences that the business pricing page does not price. Microsoft Premium includes DLP for email and files at its published price, while Google's DLP sits in Enterprise behind a sales call. A validated nonprofit should run the same comparison at nonprofit prices, where Business Premium at $5.50 and Business Plus at $6.16 per user per month on annual terms sit $0.66 apart.

If headcount moves with seasons or projects, Google's Flexible Plan suits a variable workforce. At the entry tier it costs $16.80 more per user per year than the annual plan. On Microsoft, get the monthly-commitment rate before you choose between it and the annual plan paid monthly.

Key Takeaways

• If you need both DLP and eDiscovery cases, get enterprise quotes from both vendors before signing for a business tier. At published prices, Business Premium lacks the eDiscovery licence and Business Plus lacks DLP.
• If you pick Google's annual plan, commit to the lowest headcount you expect over the contract and add seats as you hire. Adding is allowed at any time, while every seat you buy stays on the bill until renewal.
• If you expect to pass 300 users during the contract, price the enterprise plans on whichever suite you pick before committing to a business tier.

References

• Microsoft 365 for business plans and pricing — Microsoft tier prices, no-Teams and add-on prices, Copilot promotion and eligibility, usage-based AI billing, Premium security inclusions, Exchange spam filtering and Defender for Office 365 Plan 1, Defender for Business price, payment and cancellation terms, trial, 300-user cap, 90-day data access, devices, mailbox and OneDrive limits, Audit (Standard)
• Google Workspace for business — Google tier prices, 16% annual saving, pooled storage, Meet limits, Gemini by tier, Outlook interoperability, eDiscovery and Vault in Business Plus, DLP and S/MIME in Enterprise, 300-user cap
• Compare Flexible and Annual/Fixed-Term payment plans — yearly totals per user, Flexible and Annual rules, adding and reducing licences, early-cancellation terms, switching rules, variable-workforce guidance, multi-year plans
• Understand Google Workspace bills and charges — 14-day trial, proration, suspended-user charges, annual upfront charge timing, 30-day price notice, Vault as a separate subscription
• Google Vault overview — what Vault does
• Microsoft Purview service description — retention policy and label licensing, Teams retention licensing and its more-than-30-days condition, Exchange retention licensing, DLP, Message Encryption, eDiscovery (Standard) licence table
• Get started with eDiscovery — E3 or E5 licence requirement for eDiscovery cases
• Microsoft nonprofit offers — free Business Basic grant up to 300 users, nonprofit prices for Business Premium, E3 and E5, Purview Suite and combined Defender and Purview add-on prices
• Microsoft Nonprofits FAQ — who may use granted licences, 85% active-usage expectation, third-party eligibility validation and its up-to-seven-business-day timing
• Google Workspace for Nonprofits — $0 nonprofit edition and its limits, nonprofit Business Standard and Business Plus prices, Business Plus eDiscovery, retention and Vault, Enterprise discount and DLP, 2,000-user cap, eligibility verification before activation