Well, Google Docs is free -- and Office Online is free. The subscription is for the desktop software (that Google doesn't have) and 5x unlimited OneDrive storage and some Skype minutes -- for the same price, you get 10TB storage at Google and no desktop software.
I can see the reasons why one would go for the Google suite -- just wanted to point out that MS is not more expensive, it's actually cheaper.
Google's offerings are worth exactly what they charge for them. Whether they're "enough" for "a lot of users" depends on how you define the market--by number of users or by potential revenue? They're enough for grandma writing a letter or similar informal communications, but I imagine that's a niche wholly usurped by e-mail.
There are plenty of free Office alternatives already that work for 90% of the people. The Web, Android and iOS has made such tools far more accessible for non-technical users. On the computer, use Google docs, on the tablet use QuickOffice. MS has had to react to this, Office on tablets and phones are now free. For general purpose software like document editing and presentations, people might pay $4.99 max, for lifetime.
There'll be another 5-10% of users who need advanced features. That will not sustain the multi-billion revenue coming from Office products.
I don't think I've ever seen a large organization that doesn't have a critical dependency on Excel - usually with Excel plugged directly into their core financial/ERP/CRM.
Replacing Excel in most large organizations would be like trying to give a human being a skeleton transplant.
Edit: The point I was trying to make is that I wonder how important personal use of Office is to Microsoft. Arguably people either want to use what they use at work or they use something other product (in the past one of the competing office suites, probably one of the online offerings these days) - I wonder if the size of the latter category has actually changed over the years?
