I’m quite bullish on Google Sheets overtaking Excel. Today, the market share is roughly a 20/80 split between Google and Microsoft, based on conversations with experts in the space, but I think that equalizes in the next 10 years and flips in the next 20. This may seem like a long time horizon, but remember, Excel has a 21 year head start on Google Sheets and it’ll take time to prove to folks why Sheets is a better choice vs. Excel. Of course, there’s always the possibility another upstart takes on both Google and Microsoft and wins (e.g., Equals), but that’s a discussion for another day
In case you haven’t paid attention to Sheets in the last few years, the usability gap between Sheets and Excel is rapidly closing. Below are some of the main product concerns people I’ve encountered have with Sheets, including how Sheets and 3rd parties have largely addressed these concerns already:
Concern: A main complaint about Sheets is a lack of shortcuts.
Concern: Sheets cannot handle the amount of data Excel can.
Concern: It takes time to download and upload files to Drive.
Concern: Sheets is less secure than Excel.
There are several key things Sheets already does better than Excel:
Sheets has better versioning: In Sheets, not only can you view, open, and save prior versions of the Sheet, but you can also left click on a cell and can see the entire version history of that specific cell. This has saved me hours auditing billing sheets that are rewritten every month and would also save an associate iterating with an analyst on a financial model similar versioning-related headaches. You also don’t need to worry about your Sheet crashing and you losing all your work like you do in Excel. Sharepoint just doesn’t compare (yet — it’s improving!) to what Google Sheets can do with regards to version control
Sheets is better on a Mac: Excel tools and shortcuts are more limited on a Mac (though Excel for the web is a good alternative). This is a huge opportunity for Sheets as many companies, particularly tech startups, prefer Macs. This means many finance teams will need to use Macs for all their workstreams. In this case, teams are much more likely to opt to use Sheets vs. Excel as Sheets is cheaper and its shortcuts work vs. a desktop Excel solution. Additionally, Macs are also gaining share vs. PCs (60% increase in market share from 2019 to 2022), and I’ve seen this largely amongst younger people. This is a great tailwind for Sheets, and I see it contributing to Sheets’s continued success vs. Excel for the spreadsheet market. Apple’s Numbers is not used by anyone I know for heavy analyses of any kind
Sheets is much easier than Excel to collaborate & access sources of data: The collaboration point is well-known, but Sheets has also become the place to aggregate data across every and all data sources for startups. One company that’s doing an excellent job on building out these integrations is Coefficient. You can connect Sheets to everything from Salesforce to Quickbooks to Snowflake using their solution. I’m not sure their plans for integrating financial information, but Sheets being integrated with every single data system out there is a data moat that Excel cannot compete with. Data is quickly becoming mission-critical to how a business operates with data that’s accurate, reliable and fast being a huge business need and necessary to out-execute competition. The more important data becomes (and we’ve seen just what it can do with ChatGPT & proliferation of AI tools), the greater advantage Sheets has over Excel
Of course, there’s still areas for Sheets to improve upon. However, I don’t think these issues are insurmountable. Here are the biggest product issues left with Sheets from a financial modeling perspective:
Issue: Sheets is slower than Excel. Response: Based on my time horizon of 10–20 years, I see the usability gap closing completely as data speeds and compute improves. Web frameworks are also becoming more advanced / performant
Issue: Sheets charts are unintuitive. Response: I agree, but think this is overblown. I create many charts in Google Sheets and the ability to easily update Slides far outweighs the mechanical issues with the tool
In addition to product features, there are fundamental business / execution differences between Excel and Sheets that will enable Sheets’s long term success:
Google Sheets is bundled with Google Workspace which is a freemium product: Through bundling, folks who may not have used Sheets if it was a standalone product now have a lower hurdle to trying the tool. Furthermore, because Google takes a freemium approach to Workspaces (vs. , Google has been able to amass an unprecedented amount of users (~3B MAUs on Workspace), which increases familiarity, adoption, and usage of Google Sheets
Google is seemingly iterating faster: It’s difficult to tell looking from the outside in, but I just have not seen Excel make the same advancements to reach feature parity on what it lacks vs. Sheets the same way Sheets and 3P tools are doing on areas of weakness vs. Excel. If you look at feature updates this year, Excel has largely focused on improving efficiency and fixing bugs while Sheets has changed its UI, integrated further with Workspace, and launched several new features
Google’s 3rd party ecosystem is robust and will help close Sheet feature gaps: The sheer number of developers building Chrome extensions should not be underestimated. Based on a simple search which is admittedly not apples to apples, there’s ~900 Excel apps on the Microsoft store vs. 150K+ extensions
How will the Sheets displacement vs. Excel play out?
I’m not sure, but I can guess what will likely be captured by Sheets first and what will be captured last. Based on Google’s latest moves, the company seems to be highly focused on data analysis: making it easier to get data into Sheets, structure it in a database like fashion, and manipulate it fast. See smart chip data extraction as Google’s latest development on this front
I don’t see much standing in Google’s way of winning this market. In fact, I think they’re already well on their way
Wall Street will be the last Excel bastion to move. A large part of this is cultural — post about Google Sheets on Wall Street Oasis, for example, and you’re a laughingstock. In reality, unless Google Sheets is able to standup the same infrastructure that Excel has on Wall Street — particularly your Training the Street courses that makes every summer analyst an Excel truther, it will be difficult to find success in this space…for now
But I think Wall Street could be persuaded to use Sheets due to client-side adoption. Is there a world where tech bankers start using Sheets more and more often to better work with their startup clients (all on Macs using Google Sheets), realize that the usability gap has been closed and adopt Sheets? I think it’s fair to say it’s a possibility
Overall, I’m quite bullish on Google Sheets overtaking Excel. Looking forward to revisiting this post in 10 years and seeing how this all pans out
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