With Google Drive all your data is stored online, in "the cloud". Basically that means your documents are not stored on the local hard drive of the computer you are typing it on. Instead those documents are stored on Google's own servers around the world.
The upside? The upside is limitless, from enabling access anywhere, tight security and sharing controls, awesome real-time collaboration and revision control. Instead of emailing documents back and forth with friends and colleagues, I simply give them direct access to the Google Doc. I don't have to worry about anyone messing up my document, since version control let's me see all the changes they made and step back to an older version if necessary.
Google Drive is the anti-Microsoft Suite, so don't expect it to replicate all the bells and whistles you find in MS Word and Excel. Google likes to keep things simple and clean. If there is a specific feature you're missing, use the "Connect More Apps" button to more functionality to the basic app. A few of the most useful Google Drive Apps I've used are:
- HelloFax lets you send free faxes from Google Drive
- Pixlr Editor is a robust photo editor
- LucidCharts provides hundreds of diagrams for flow charting
- WeVideo lets you create and edit videos with no additional software