Microsoft 365 vs Google Workspace UK: which is better for SMEs?

What to take away

Compare the commitments, not the feature lists

Both suites cover email, documents, chat, meetings and file storage, so a feature grid rarely separates them. The differences that matter to a UK buyer sit in the contract, the billing currency and where data rests.

Microsoft documents which core services store customer data at rest in a chosen geography, and the UK is one of the regions offered. Google publishes a data regions policy that names the services it covers and lists the ones it does not. Read those exclusions line by line rather than accepting a reseller summary.

Data residency: named UK regions and exclusions

Microsoft's United Kingdom data residency covers Exchange Online, SharePoint Online, OneDrive and Teams at rest. Microsoft names UK South and UK West as its UK cloud regions. Support access, telemetry and some backups can sit outside the UK.

Google Workspace data regions can be set to the United Kingdom for covered services such as Gmail, Drive, Docs, Meet and Chat. Google's policy excludes Google Vault, Google Keep and most third-party apps.

Residency is not the same as compliance. The NCSC cloud security guidance on shared responsibility and identity controls is a sensible read before you accept a vendor summary as fact.

Price in pounds on the same units

Microsoft 365 and Google Workspace both publish GBP list prices per user per month, excluding VAT. A like-for-like comparison takes five steps.

VAT is added at the standard rate if you are VAT registered, so keep the ex-VAT model and the VAT line apart.

Budgeting for productivity software means pricing the end at the beginning, which is a useful discipline when exit and migration costs arrive late.

UK GDPR duties that survive the choice

Your business is the controller. Records of processing, lawful basis, retention and subject requests stay with you, whichever vendor holds the data. The ICO's UK GDPR guidance sets out those duties and applies whether data rests in a UK region or a European one.

The Data Protection Act 2018 sits underneath the UK regime and carries the enforcement and exemptions framework.

Teams against Meet for a UK team

Teams is bundled into most Microsoft 365 business plans, and Meet is bundled into every Workspace plan, so comparing them as standalone products rarely reflects what you pay.

Test the calmer question: which suite already holds your calendar, your identity provider and your file permissions? Recordings and transcripts create fresh residency questions, so check where they are stored and how long they are kept.

Telephony is the exception. Teams Phone and Google Voice are separate add-ons, so price them outside the core licence.

Common questions

Is Microsoft 365 or Google Workspace cheaper for a UK SME?

Neither is cheaper in every case. Compare GBP list prices on the same unit, per user per month excluding VAT, then add extras and term discounts before you decide.

Can I keep UK data in the UK with either suite?

Both offer regional storage, but coverage differs by service. Ask for the exclusions list in writing for the workload you plan to move.

Does UK GDPR require a UK data centre?

No. UK GDPR requires lawful processing and a valid transfer mechanism for restricted transfers, not a UK server. A shortlist of GDPR compliant project management tools shows how that review looks in practice.

Which suite suits a hybrid team in England?

Either can work. Pick the suite your team already opens each morning, because adoption decides the return more than a feature comparison does.