For what 95% of people are doing Google Docs is more than sufficient.
Edit: Also, doesn't Google Docs have controls to limit sharing of online documents to certain persons, groups, or teams?
The big concern I can think of is PII spillage, but honestly I think I trust Google more than I trust random GS-13s with their externals and laptops. DoD at least has PKI but in the Navy we're recommended to also use a password-based certificate for encrypted externals in case the CAC is lost, which kind of defeats the point since I'm sure the password is not going to be high-entropy.
With minimal studying on their own, a smart office worker can be pretty efficient doing analysis with Excel Pivot Tables while avoiding a lot of red tape. I could see the switch to an office suite with reduced features getting in the way of work done by a lot of behind the scenes, unsung heroes.
I think that when actual exposure to how people use software is largely comes from support calls, it is easy to get an inaccurate picture of bumbling and general incompetence, rather than creative solutions to often arbitrary constraints on their tool sets.
We write memoranda and instructions, we make PowerPoint briefings, we use scads and scads of spreadsheets, and although I personally use and admire PivotTables, most don't.
Even the famous "Access database that underlies the operation" is very rarely to be found around here. The only thing I've ever seen an Access database behind around here (besides the ones I personally use) are for FITREP processing in the Navy.
Perhaps surprisingly, much of the stuff you'd use "advanced spreadsheets as database" for end up being run by actual databases with website frontends around here, which makes office software even less essential; just make the ad-hoc query on the web page and export to Excel and you're done.
I have no doubt that macros are in use somewhere in DoD, but it's really not that extensive for day-to-day stuff.
If you don't believe me, just search for .xlsm files compared to .xlsx on a standard Navy command's share drive.