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Google has done a commendable job in the field of developing cloud-based applications. BUt the applications developed by Microsoft Office suite has been in the market from three decades. It ha taken the customer feedback and improved drastically over time. Thi blows Google's application out of the water in terms of features, interface, performance and portability. This might not matter at all for 80% of the casual user and 20% power users.
Google has done an excellent job in showing what can be done with offline applications, however most of the times, they're not fully functional as the Microsoft applications. It might not make a very drastic change for casual users, who do it for their school or university purpose. But the effect will be visible to the power users.
The applications of MS Office are much stable, and reliable when it comes to handling a large set of Data. Still, people may find it hard to access, organise and analyze a set of data with more than 10,000 entities (for example), in Google applications. Also, there are multiple functions that MS Office offers that are still missing in Google applications.
I think this can be the reason why people pay for Microsoft applications instead of using the free applications provided by Google.
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