Microsoft 365 vs Google Workspace Enterprise Plus Licensing Comparison

Microsoft 365 vs Google Workspace Enterprise Plus Licensing Comparison

Microsoft 365 and Google Workspace are the two leading enterprise productivity suites, each with distinct cost structures and capabilities.

Microsoft 365 offers a comprehensive feature set (including advanced security and desktop Office apps) at a premium price, while Google Workspace provides core collaboration tools at a lower per-user cost.

CIOs must weigh budget vs. functionality – and leverage competition in negotiations – to choose the best fit for their organization.

Microsoft 365 vs. Google Workspace in the Enterprise

Both Microsoft 365 and Google Workspace are comprehensive cloud productivity platforms that are popular among large organizations.

Microsoft 365 (Enterprise plans) bundles Office applications, cloud services (including Exchange/Outlook, OneDrive, SharePoint, and Teams), Windows Enterprise OS licensing, and Enterprise Mobility + Security features. Google Workspace offers Google’s suite of collaboration apps (Gmail, Docs, Sheets, Drive, Meet, etc.) entirely in the cloud.

Each vendor has tiered enterprise plans, and companies with 5,000+ users typically license these via multi-year agreements (Microsoft’s Enterprise Agreement, Google’s enterprise contracts). The goal for CIOs is to provide users with the required capabilities while optimizing costs through the optimal license mix and contract terms.

Licensing Models:

Microsoft’s enterprise plans include E3 and E5 (plus an E1 for Office 365 without desktop apps). E3 covers the standard Office suite, email, 1 TB of OneDrive storage, Windows 11 Enterprise, and basic security; E5 includes everything in E3, plus advanced security, compliance, analytics (Power BI), and voice and telephony features.

Google Workspace’s enterprise tiers include Enterprise Standard and Enterprise Plus. Enterprise Standard provides the full Google app suite with enhanced security and compliance (e.g., Vault for eDiscovery, data loss prevention).

At the same time, Enterprise Plus offers increased meeting capacity, enhanced admin controls, and advanced security features (such as DLP and data regions) – it’s Google’s closest equivalent to Microsoft’s E5.

Both vendors allow mixing plan tiers for different users (e.g., assigning E5 only to power users or Enterprise Plus only to certain departments), which can help control costs.

Cost Comparison for Large Organizations

For large enterprises, per-user licensing costs add up quickly, and Google’s plans generally come at a lower list price than Microsoft’s.

Below is a side-by-side comparison of representative list prices (per user, per month) for key enterprise plans:

*(Google’s enterprise pricing is typically obtained via quote; ~$27 and $35 are approximate list-equivalent prices for Enterprise Standard and Plus.)

At these rates, the annual cost for 5,000 users on Microsoft 365 E3 would be approximately $2.16 million, compared to roughly $1.62 million on Google Enterprise Standard – a savings of over $ 500,000 per year with Google.

For the top tier, 5,000 users on Microsoft 365 E5 is ~$3.42 million/year, while Google Enterprise Plus would be about $2.10 million – a difference of $1.3+ million annually in Google’s favor. This gap highlights why cost-conscious CIOs consider Google Workspace as a viable alternative to Microsoft.

However, these figures don’t tell the whole story. Enterprise deals rarely pay the full list price; Microsoft’s Enterprise Agreement (EA) volume discounts and negotiated pricing can significantly reduce costs.

For instance, organizations with 5,000 or more seats often secure 15–30% off Microsoft’s list prices, especially if they commit to a three-year EA and bundle multiple Microsoft products. Google, too, offers custom discounts or incentives for large customers (e.g., extended free trials, % off for multi-year commitments).

In one recent deal example, a Fortune 500 firm negotiated Google Workspace Enterprise Plus at under $25 per user per month, well below the nominal $35, in exchange for a long-term commitment.

The competitive dynamic can be used to the buyer’s advantage: Microsoft generally doesn’t want to lose major clients to Google (and may counter with better discounts or added value), while Google is keen to win marquee enterprise accounts from Microsoft and might undercut on price.

CIOs should also consider ancillary costs. Microsoft 365 includes licenses for Windows Enterprise OS – meaning if you use Microsoft 365, your users’ Windows 10/11 Enterprise upgrade rights are covered.

In a Google Workspace scenario, Windows licensing is not included; companies would still need to license their desktop OS or other tools separately (which adds cost back into the equation if advanced Windows features or support are required).

Similarly, Microsoft 365 E5 bundles features such as a phone system (Teams Phone with Audio Conferencing) and Power BI Pro. If a company on Google needs similar capabilities, it might incur additional costs for third-party solutions (e.g., Zoom or Cisco for telephony, a BI tool subscription, etc.).

These factors can narrow the pure pricing gap when doing a true Total Cost of Ownership (TCO) analysis.

Recent Price Changes: It’s worth noting both vendors have adjusted prices in recent years. Microsoft raised the prices of commercial Office 365/M365 in 2022, and introducing new add-ons like Copilot AI at $30 per user could substantially increase Microsoft’s costs if adopted widely.

Google announced price increases for certain plans in 2024 (e.g., increasing Enterprise Standard from approximately $20 to $27 and Enterprise Plus from around $30 to $35 per user per month) as it adds more AI features to Workspace.

Enterprise customers should plan for potential future price hikes and negotiate price protections or caps in their contracts where possible.

Capability and Feature Differences

Lower cost is attractive, but CIOs must ensure the chosen suite meets their organization’s requirements.

Microsoft 365 and Google Workspace differ in their capabilities, particularly in areas such as security, compliance, and application functionality.

Here are key comparisons from a capability perspective:

• Productivity Applications: Microsoft provides the full Office suite (Word, Excel, PowerPoint, Outlook, etc.) with rich desktop versions in all enterprise plans (E3/E5). These apps are feature-rich and work offline. Google Workspace offers Docs, Sheets, Slides, Gmail, and other apps through a web browser (with limited offline functionality and simpler feature sets). For everyday work, Google’s apps cover most needs. Still, power users of Excel or PowerPoint may find Microsoft’s desktop apps indispensable for advanced functionalities (complex macros, large data processing, sophisticated design). Suppose your workforce heavily relies on Office macros or complex spreadsheets. In that case, this is a consideration – many enterprises end up maintaining some Office licenses even if they go primarily Google, which can erode cost savings.
• Collaboration and Communication: Both suites excel in enabling teamwork, but approaches differ. Microsoft 365 focuses on Teams for chat, video meetings (with support for up to 300 participants in E3 and 1,000 in E5), telephony, and collaboration channels. Teams are tightly integrated with Office and SharePoint, enabling persistent project workspaces that include files, chats, and apps. Google Workspace offers Google Meet for video conferencing (up to 500 participants in Enterprise Plus) and Chat/Spaces for team messaging. Google’s tools are intuitive, and Meet is purely web-based. Still, they lack some of the advanced unified communication features of Teams (e.g., an integrated PBX calling system is not included by default – Google Voice is a separate add-on). Organizations deeply invested in internal SharePoint sites, complex workflows, or custom Teams apps may lean toward Microsoft, whereas those prioritizing simplicity and ease of use might prefer Google’s straightforward approach.
• Storage and Document Management: Microsoft 365 E3/E5 plans include OneDrive (1 TB per user, expandable) and SharePoint Online for intranet and document management. Google Workspace provides Google Drive with pooled storage (5 TB per user in Enterprise Plus, pooled across the organization). A notable nuance: Google’s storage quota counts everything (email, Drive files, photos, etc.) against that 5 TB per user, whereas Microsoft’s quotas are separated by service (e.g., a user gets a 50 GB Exchange mailbox and 1 TB OneDrive, and mailbox size doesn’t eat into OneDrive storage). In practice, both suites can accommodate enterprise storage needs (and offer additional storage if needed). Still, Microsoft’s separation of storage by workload can mean fewer concerns about hitting limits for users with high email volumes. SharePoint also offers more sophisticated document management, custom site capabilities, and workflow features compared to Google Drive and Sites. If an organization requires a comprehensive intranet or robust content management, SharePoint (included in M365) is a valuable asset.
• Security & Compliance: This is a major differentiator. Microsoft 365 E5 is packed with advanced security and compliance tools: Microsoft Defender suite (for endpoint, email, and cloud apps), Entra ID P2 (premium identity and access management with conditional access and identity protection), Purview compliance features (DLP, eDiscovery, Insider Risk, information protection with AIP), and more. Microsoft 365 E3 provides a baseline of security (Entra ID P1, basic DLP, Defender Antivirus, etc.), but E5 is among the most comprehensive security bundles available on the market. Google Workspace Enterprise plans include key features such as data loss prevention for Gmail and Drive, Google Vault for eDiscovery and retention, secure endpoint management, and encryption. Google’s security is strong for a cloud productivity suite (benefiting from Google’s overall secure infrastructure), but it does not match the breadth of dedicated enterprise security tools Microsoft offers in E5. For example, there is no Google equivalent of Microsoft’s Defender for Endpoint or the full suite of identity governance tools; companies might need separate security solutions to fill those gaps if they use Google. In highly regulated industries or organizations with very stringent compliance requirements, this distinction is critical. Many CIOs conclude that if advanced security is a top priority (such as handling sensitive IP and regulated data), Microsoft 365 E5’s richer security stack can justify its higher cost. On the other hand, organizations that find Google’s security sufficient for their needs can save money with Workspace – but they should perform a careful risk assessment.
• Analytics and Advanced Services: Microsoft 365 E5 includes Power BI Pro for enterprise analytics and reporting (enabling users to create and share dashboards). It also includes features like Teams Phone (cloud PBX for calling) and advanced analytics in Microsoft Viva Insights. Google Workspace does not include a comparable BI tool in its standard plans, nor a built-in telephony service (again, Google Voice is separate and at additional cost). Google’s focus is more on core collaboration, whereas Microsoft aims to be an all-in-one ecosystem (even extending to device management with Intune, which is part of M365). If an enterprise value having a single vendor platform for everything from email to phone to business analytics, Microsoft’s bundle is attractive. If those extras are not needed or can be fulfilled through other solutions, Google’s leaner offering may suffice.
• AI and Automation: Both vendors are introducing AI assistance into their suites. Google’s Gemini AI features (successor to Google’s “Duet AI”) are now integrated across Gmail, Docs, Meet, and other services, and are included in the Business and Enterprise tiers. This can help with tasks such as drafting emails, generating document summaries, or creating images and presentations – essentially at no extra charge beyond the Workspace subscription. Microsoft’s approach is Microsoft 365 Copilot, a powerful AI assistant that can draft content, analyze data, and automate workflows across the Office suite – but Microsoft plans to sell Copilot as a paid add-on (currently priced around $30/user/month). This means that a Google Workspace Enterprise customer may receive built-in AI productivity benefits at a lower overall cost.
  In contrast, a Microsoft customer would pay a substantial premium for similar AI capabilities. For AI-hungry organizations, this presents a new factor in the cost versus capability equation: Google’s pricing advantage grows if Microsoft’s AI is priced separately. (It remains to be seen if Microsoft will offer bundled deals or if Google will charge extra in the future, but as of 2024–2025, this is the landscape.)
• Ease of Use and User Adoption: Google Workspace is often praised for its clean simplicity – minimal training is needed for users to start collaborating in Docs or Meet. Microsoft 365’s vast array of applications and features can have a steeper learning curve and may require more admin overhead to fully utilize. For a CIO, this means considering the “soft costs” of each platform: Deploying Microsoft 365 E5 may require more in-depth user training and IT expertise to manage all the features (though many large enterprises already possess the necessary Microsoft admin skillset). Google’s suite might roll out more easily and encourage a modern collaboration style, especially for a workforce comfortable with Google’s interface (or if the company is moving off legacy systems and wants a fresh start). That said, an enterprise deeply embedded in Microsoft technology (Windows, Office, SharePoint, etc.) could face significant change management challenges when switching to Google – the disruption might outweigh pure licensing savings in the short term.

In summary, Microsoft 365 tends to excel in breadth and depth of features, while Google Workspace excels in cost and simplicity.

The right choice depends on what your organization values more: comprehensive capabilities (and integration with Microsoft’s ecosystem) or a streamlined platform that covers the essentials at a lower price point.

Enterprise Agreement and Contract Considerations

When comparing Microsoft vs. Google for 5,000+ user enterprises, it’s not just about technology – it’s about contract negotiation.

Microsoft typically sells to large customers via an Enterprise Agreement (EA): a 3-year contract that locks in pricing for that term, with an initial number of licenses and true-up adjustments annually (you can increase seats during the term, but generally cannot reduce license counts until renewal).

Google Workspace enterprise deals often require a similar annual or multi-year commitment to secure significant discounts.

A common pitfall is signing a long-term deal for a great discount, then finding you can’t scale down licenses if your user count drops – so forecast carefully and negotiate flexibility if possible.

Negotiation Leverage:

Use the existence of the rival suite as a form of leverage. If you’re a Microsoft EA customer approaching renewal, obtaining a Google Workspace proposal (with attractive pricing) can be a bargaining chip – Microsoft sales reps have been known to match pricing or throw in additional value (e.g., free months, added products like Teams Phone or Azure credits) to retain a client.

Likewise, if you’re on Google and Microsoft is pitching, Google may offer incentives to keep you (or Microsoft will undercut to win you back). From a negotiation perspective, keeping both vendors in play maximizes your advantage.

Even if you don’t truly intend to switch, a credible evaluation of Google Workspace can pressure Microsoft to concede better terms (and vice versa).

Contract Terms to Watch:

Pay attention to clauses regarding price escalations, renewal caps, and compliance requirements. Ensure any quoted discounts remain in effect for the full term and try to cap renewal increases.

With Microsoft, verify that the EA includes the right to reduce quantities at renewal or shift between E3 and E5 as needed. With Google, clarify if a multi-year agreement fixes your user count or allows adjustments; some Google reseller contracts have had provisions where you can increase but not decrease licenses during the term (similar to Microsoft).

Clarify support levels, too – Microsoft’s premium support is separate, while Google’s highest-tier support may come with Enterprise Plus; negotiate support perks if they matter to you.

Compliance and Audits:

In the past, Microsoft was notorious for conducting software license audits. With cloud subscriptions, compliance risk shifts to ensuring you have subscriptions for all active users and features (e.g., not using a feature outside your plan’s rights).

It’s generally easier to stay compliant with M365 and GWS subscriptions (the systems won’t let you access what you didn’t buy), but large enterprises should still maintain good license hygiene. Microsoft still performs true-up audits and license verifications, particularly at the time of EA renewal.

Google currently has a lighter touch on compliance audits, but they will enforce contract terms (like not letting you drop below a committed number of users).

From a risk standpoint, neither suite will give you free passes – but Microsoft’s compliance programs are more mature (and potentially punitive) given their decades of audit history.

CIOs should ensure they have proper internal tracking of license assignments for either platform to avoid surprises.

Finally, consider hybrid approaches if appropriate. Some enterprises pilot Google Workspace in a division or use it in parallel for specific collaboration needs, while retaining Microsoft for core productivity.

Although running both suites organization-wide in the long term is usually inefficient, it can be a transitional strategy or used in M&A situations.

Additionally, consider third-party tools or services that can ease the migration process if you decide to switch (for example, tools to migrate mailboxes and files, or interoperability solutions to link Teams with Google Meet during a phased transition). These factors should be part of the decision-making and negotiation plan.

Recommendations

In making a strategic decision between Microsoft 365 and Google Workspace and negotiating the best enterprise deal, consider the following recommendations:

• Align Choice with Business Needs: Audit Your Organization’s Actual Needs. If advanced security, compliance, and desktop Office apps are mission-critical, consider Microsoft 365 (at least for those users who require it). If your workforce primarily needs email, file sharing, and standard documents and spreadsheets, Google Workspace can meet these needs at a lower cost. Don’t over-buy features that won’t be used.
• Mix and Match License Tiers: Optimize costs by mixing plans. For Microsoft, you might license a core set of users on E5 and the rest on E3 (getting E5’s benefits only where necessary). Google similarly allows mixing Enterprise Standard and Plus. This ensures you’re not paying top dollar for every user if not everyone needs the top-tier features.
• Leverage the Rival in Negotiations: Even if you have a preferred suite, solicit a quote from the other vendor to ensure you’re getting the best deal. A competitive bid is a powerful leverage. Use Google’s lower pricing to negotiate a better Microsoft EA renewal, or use Microsoft’s extensive capabilities to push Google for deeper discounts or added services. Let vendors know you have options.
• Negotiate Contract Flexibility: Push for terms that allow some elasticity – e.g., the ability to reduce users at yearly checkpoints if your headcount drops or to shift users between plan tiers. Also, seek to cap renewal price increases (e.g., no more than X% uplift in the next term) to avoid post-contract sticker shock.
• Consider Total Cost of Ownership: When comparing costs, include all factors. When visiting Google, budget for separate Windows OS licensing, potential third-party security tools, or other add-ons. If going with Microsoft, factor in the possibility of extra costs, such as Copilot AI or premium support. Sometimes a supposedly cheaper option might incur hidden costs to achieve parity with the other.
• Plan for Change Management: If you decide to switch platforms (e.g., from Microsoft to Google or vice versa), invest in user training and effective change management. The productivity impact of a new toolset can be significant. Ensure pilot programs, stakeholder buy-in, and a phased migration plan to minimize disruption – this protects the value of any cost savings.
• Evaluate Future Roadmaps: Look at each vendor’s innovation pipeline. Microsoft’s ecosystem is evolving (AI, integrations with Azure, etc.), and Google is rapidly enhancing Workspace with AI and third-party integrations. Choose the platform that aligns with your digital strategy 3–5 years out, not just today’s needs. Ensure your contract provides you with access to new features (or at least the option to add them) without incurring punitive costs.
• Use Expert Benchmarking: Engage independent licensing advisors or use industry benchmarks to validate your deal. Large enterprises often work with firms like Redress Compliance to benchmark discounts and identify negotiation opportunities. Knowing what other companies of similar size are paying can strengthen your position when you’re at the table with Microsoft or Google.
• Monitor Usage and Optimize Continuously: Regardless of the suite you choose, treat it as an ongoing optimization exercise. Regularly review license utilization – are there any unused accounts or features that can be downgraded? Both Microsoft and Google add features over time; you might be able to remove a third-party product because a new native feature covers it (saving cost elsewhere). Staying on top of this ensures you get maximum value from your licensing spend.

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