Obviously YMMV, but I don't think it's as simple as you're making it out to be.
It’s honestly pretty good. All the usual features are there — importantly, version history (no more Contract v15 FINAL.docx).
The key thing is it works with Teams and SharePoint and has collaborative editing, works in browser, desktop app, or phone.
They had an on-premises version of OneDrive too, not sure if that’s still a thing.
It’s not all a bed of roses. Gmail still feels nicer than Outlook web, but Outlook web is catching up. Collaborative editing feels much more robust in Google Docs. But the OneDrive client is way nicer than Google Drive (for me, at least).
I’d definitely say Google’s and Microsoft’s “online business collaboration” offerings are comparable. I suspect users will have preferences based on what they’re used to.
Of course, if your org uses both you’re in for a world of hurt. Email works well enough, but even calendaring has friction. Filesharing / chatrooms? Doesn’t interoperate well at all.
Is this very different from the many, many universities that offer both Google Apps and Office 365 to students/staff/faculty?