Microsoft 365 or Google Workspace: How to Choose for Your SME

Most Dutch SMEs make the Microsoft 365 or Google Workspace decision once, early, usually when a founder sets up the first few mailboxes, and then live with it for years without ever revisiting it on purpose. That's a reasonable outcome if the original choice happened to fit, and an expensive one if it didn't: the two platforms are close enough in price and polish that neither is a universal winner, but they differ in specific, practical ways — how storage is allocated, what device management is actually bundled in, and how each handles EU data residency — that matter more to a growing business than which app icons look nicer.

Microsoft 365 or Google Workspace: what you're actually choosing between

Microsoft 365's business tiers are built around the desktop-grade versions of Word, Excel, PowerPoint and Outlook, which also run in the browser and on mobile, with Exchange handling mail and calendar, OneDrive and SharePoint handling files, and Microsoft Teams as the meeting and chat hub. Google Workspace is organised the other way around: Gmail, Google Docs, Sheets and Slides are browser-first applications (a separate "Drive for desktop" tool syncs files locally, but the core apps themselves are not desktop software), with Google Meet and Chat for calling and messaging. Both bundle video conferencing by default, but the room sizes differ by tier: Google Meet allows up to 100 attendees on Business Starter, 150 on Business Standard and 500 on Business Plus.

Neither description is a value judgement — some teams genuinely work better with documents that live natively on a laptop, others work better with everything permanently in a browser tab — but it's worth being honest with yourself about which one your team already behaves like, because retraining habits is harder than it sounds.

Storage and mailboxes, compared

The two platforms allocate storage on different logic, and the difference is easy to miss until you hit a limit.

Microsoft splits storage by purpose: every Microsoft 365 Business tier (Basic, Standard and Premium) gives each user 1 TB of OneDrive storage, plus a separate mailbox allowance of 100 GB of primary mailbox storage. Business Premium adds a much larger 1.5 TB of mailbox archive storage on top of that, where Standard and Basic are limited to 50 GB of archive. If your business keeps years of email on file rather than archiving aggressively, that archive difference between Premium and the cheaper tiers is the one to check before you buy the lower tier to save money.

Google Workspace pools everything instead: Gmail, Drive and Google Photos share a single combined storage allowance per user, rather than separate mail and file quotas. Business Starter gives 30 GB combined per user, Business Standard 2 TB combined, and Business Plus 5 TB combined. A heavy email archiver on Workspace is drawing from the same pool as their file storage, which is a different kind of planning problem than Microsoft's split allowance — neither is better, but they fail differently when someone is careless about cleanup.

Device and identity management: the real tier difference

This is where the two platforms diverge most for a growing SME, and it's the detail most comparisons gloss over.

On Microsoft's side, device and identity management is not evenly spread across the Business tiers. Microsoft 365 Business Premium is the tier that bundles Intune for managing and protecting company devices and a fuller level of Microsoft Entra ID for identity and access management, alongside Microsoft Defender for threat protection. Microsoft 365 Business Standard, the mid-tier most SMEs default to for the Office apps and Teams, does not include Intune or the same depth of Entra ID at all — if you need to enforce a passcode on company phones or wipe a lost laptop remotely through the platform itself, Standard alone will not do it. That makes the jump from Standard to Premium less about which apps you get (the apps are nearly identical) and entirely about whether you need managed device security, which is a decision worth making deliberately rather than defaulting to the cheaper tier and discovering the gap later. Our guide to mobile device management covers what that device layer actually involves day to day.

Google Workspace spreads device management more evenly, but still tiers it. Every Business plan, including the entry-level Business Starter, already includes basic endpoint management: blocking a device, remotely signing a user out of their account, and account-level remote wipe on mobile. What is not included at the base tier is wiping an entire device outright, along with stricter passcode enforcement and Android work profiles — those sit behind a higher tier than Business Starter. So the Workspace equivalent of the Microsoft Standard-versus-Premium question is less of a cliff and more of a staircase, but it is still there.

Data residency and the AVG

For a Dutch SME, this is usually the question underneath the question: can we keep this data in the EU, and does that actually help with the AVG?

Microsoft's commitment here is the EU Data Boundary: for Microsoft 365 customers whose sign-up location is in the EU or EFTA — the Netherlands is explicitly one of the EU Data Boundary countries, and also one of the countries where Microsoft operates or plans EU Data Boundary datacentres — most customer data and personal data is stored and processed within that boundary, with a documented, narrow set of exceptions (certain system logs, a handful of optional features you'd have to actively turn on, and services like Multi-Geo that are deliberately out of scope). The useful part for an SME: this applies at the tenant level based on where you signed up, not as a separate tier you have to buy.

Google Workspace handles it differently: admins can set a data region policy that pins "data at rest" and processing to "Europe," but that control is only available from Business Standard upward — Business Starter customers are not covered by data region policies at all, even if you try to apply one to their account. If EU data residency specifically is why you're reading this, that one line is worth knowing before you buy the cheapest Workspace tier and then ask your admin to turn on a feature that isn't there.

Neither vendor's residency commitment, on its own, is the same thing as complying with the AVG — storing data in Europe is one factor, not the whole answer, and you'll still need a proper agreement with whichever vendor you choose covering what they're allowed to do with your organisation's mail and file data. That's a separate conversation from where the servers sit, but it's one worth having at the same time you're picking a platform rather than afterwards.

Collaboration style and file compatibility

If your business regularly exchanges Word and Excel files with accountants, government portals, suppliers or clients — which describes most Dutch SMEs — Microsoft 365 avoids a layer of format conversion that Google Workspace still has to do under the hood, since Docs, Sheets and Slides read and write Office formats rather than being built around them natively. That conversion is good, not perfect: complex Excel macros, intricate spreadsheet formatting and some Word styling can shift slightly when they cross between the two. If your paperwork is mostly PDFs, forms and straightforward documents, this barely matters. If your finance team lives inside a complicated Excel model, it matters more than almost anything else in this article.

Google Workspace's strength shows up in a different place: real-time, browser-native collaboration that doesn't depend on which device someone opened the file from, and an admin experience most people find there's less to configure before it simply works. Teams that already think in Gmail and share documents by link rather than by attachment tend to feel at home faster.

Migration effort: what switching actually costs

Moving between the two is a real project, not a weekend task, regardless of direction. The predictable parts: mailbox and calendar migration (routing mail without a gap means careful MX record cutover, not a single flip of a switch), re-training staff on a genuinely different interface even where the underlying task is the same, and converting anything that depends on platform-specific features — Excel macros and Power Automate flows on one side, Apps Script and Google Sheets formulas on the other — none of which move over automatically. Our guide to cloud migration for SMEs covers the staging and sequencing that applies to a platform switch like this one too. If you're mainly worried about being stuck with whichever vendor you pick, our guide on avoiding vendor lock-in covers what to check about data export before you sign, for either platform.

A simple decision framework

Lean towards Microsoft 365 if: your business already lives in Word and Excel files, you exchange a lot of documents with external parties who do the same, you want managed device security bundled with your productivity suite (which means budgeting for Business Premium rather than Standard), or your team already runs on Windows and Teams.

Lean towards Google Workspace if: your team is small, cloud-native and collaborates mostly by link-sharing rather than attachments, you want browser-based simplicity with minimal setup, and you're comfortable buying at least Business Standard if EU data residency matters to you.

Either way, treat the plan tier as its own decision, separate from the platform. The platform question is about how your team works. The tier question is about what you're actually buying — and on both platforms, the cheapest tier quietly leaves out the device and data controls that the "which platform" decision made you think you were getting.

FAQ

Is Microsoft 365 or Google Workspace better for a small business? Neither is universally better. Microsoft 365 tends to suit businesses that already work in Word and Excel files and want device management bundled in at a higher tier; Google Workspace tends to suit smaller, cloud-native teams that collaborate mostly through browser-based sharing. The right answer depends on your existing habits more than on either platform's feature list.

Does Google Workspace store data in the EU? It can: admins can set a data region policy that keeps data at rest and processing in Europe, but that control is only available on Business Standard and Business Plus, not on the entry-level Business Starter plan.

Do we need Microsoft 365 Business Premium for device management? If you want Intune-based management of company devices and a fuller level of Entra ID identity protection, yes — Business Standard, the tier most SMEs default to, does not include either.

Can we switch from Google Workspace to Microsoft 365 later, or the other way round? Yes, but treat it as a real migration project: mail routing, staff retraining and anything built on platform-specific features (macros, Apps Script, automation flows) all need planning. It is not a weekend task in either direction.

How much does Microsoft 365 or Google Workspace cost per user? We won't quote a fixed figure here, because list prices change and vary by region, billing term and whether you include Teams or recent AI add-ons. Compare the current euro pricing for the specific tiers you're considering directly on each vendor's own pricing page before deciding.

Choosing without guesswork

If you're weighing this decision for your own business, our Cloud & Infrastructure team can map your current setup against both platforms before you commit to either. Once you've picked one, our Managed IT Support team can run the day-to-day administration, and our Cybersecurity & Identity team can configure the device and identity controls that the plan you choose actually makes available.