Embedded Files
You can edit Microsoft Office files stored in Google Drive without the need to convert them to Google format. When you open a Word, Excel or PowerPoint file in Google Drive, you will be able to make changes to the file using any of the features available in Docs, Sheets and Slides, and your changes will be saved as you are making them.
To open a Microsoft Office file in Google Drive:
Double-click on the file you wish to open
Click on the Open With drop-down arrow along the top of the screen and choose the Google app you wish to open the file with e.g. Google Docs
You will be able to see that the file is in Microsoft Office format by the .docx, .xlsx or .pptx indicator along the top of the document:
Your changes will be saved automatically as you are editing the file, and the Microsoft Office format will be retained.
To convert a Microsoft Office file to Google format:
Open the file in Google Drive as described above
Click on the File menu and choose Save as Google Docs, Save as Google Sheets or Save as Google Slides depending on the application you are using
A new copy of the file will be opened in Gooogle Docs, Sheets or Slides format.
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