Something significant is happening across European government IT. In 2025 and into 2026, Denmark announced its plan to replace Microsoft 365 across public administration. The German state of Schleswig-Holstein committed to migrating 25,000 government workstations from Microsoft Office to LibreOffice and from Windows to Linux, with Nextcloud replacing SharePoint and OneDrive. Austria's Federal Ministry for Digital and Economic Affairs (BMWET) began piloting sovereign collaboration platforms. France's public sector has been progressively tightening restrictions on Microsoft 365 use since the CNIL's 2022 guidance, with multiple ministries now running Nextcloud instances for internal collaboration.

This is not a niche experiment driven by ideological preference. It is a continent-wide policy shift backed by legal analysis, procurement reviews, and hard cost calculations. The European Data Protection Supervisor (EDPS) ruled that the European Commission's own use of Microsoft 365 violated data protection regulations. The Dutch government's Data Protection Impact Assessment (DPIA) on Microsoft 365 identified ongoing risks that required contractual mitigations Microsoft has been slow to provide. When national governments start treating a software vendor as a compliance liability, the market follows.

But here is what most of the coverage misses: switching from Microsoft 365 to Nextcloud is only half the decision. The other half -- arguably the more consequential half -- is where you host it. Running Nextcloud on AWS Frankfurt or Azure Germany does not give you sovereignty. It gives you open-source software on infrastructure that remains subject to the US CLOUD Act. You have changed the application layer but left the fundamental jurisdictional problem untouched.

This article is the comparison that enterprise IT leadership actually needs. We break down the true total cost of ownership, explain what digital sovereignty means at the infrastructure layer, compare operational reliability, and outline a practical migration path. The numbers are based on a 200-user organization -- a size that represents the decision point where most enterprises start taking this seriously.

True Total Cost of Ownership: A 3-Year Comparison

Cost comparisons between Microsoft 365 and self-hosted alternatives are notoriously misleading. Microsoft advocates point to the simplicity of per-user licensing and the breadth of included applications. Open-source advocates undercount the real costs of infrastructure, support contracts, and office suite licensing. Neither side does the math honestly.

We will.

The following analysis compares Microsoft 365 Business Premium against Nextcloud Enterprise hosted on MassiveGRID's single-tenant Nextcloud infrastructure, including all the costs that both sides typically omit.

Microsoft 365 Business Premium: What You Actually Pay

Microsoft 365 Business Premium is priced at $22.00 per user per month as of early 2026. This is not the price most organizations started paying. Microsoft increased Microsoft 365 pricing three times between 2022 and 2025:

For a 200-user organization on Business Premium, the straightforward licensing cost is $4,400 per month, or $52,800 per year. Over three years, that is $158,400 in licensing alone.

But licensing is not the total cost. Organizations using Microsoft 365 also typically pay for:

A conservative estimate for total Microsoft 365 cost including backup and basic compliance tooling is $28-30 per user per month, or $201,600-$216,000 over three years for 200 users.

Nextcloud Enterprise on MassiveGRID: What You Actually Pay

The Nextcloud stack has three cost components: the Nextcloud Enterprise subscription, the office suite license, and the hosting infrastructure.

Here is the three-year comparison in full:

Cost ComponentMicrosoft 365 Business PremiumNextcloud Enterprise on MassiveGRID
Per-user licensing (3 years)$158,400$0 (open-source core)
Enterprise subscription (3 years)Included$10,200 - $14,700
Office suite license (3 years)Included$7,500 - $10,500
Hosting infrastructure (3 years)N/A (SaaS)$5,364 - $10,764
Third-party backup solution (3 years)$14,400 - $28,800Included in MassiveGRID
Compliance add-ons (3 years)$0 - $144,000$0 (self-managed policies)
3-Year Total (conservative)$172,800 - $331,200$23,064 - $35,964
Per-user per-month (avg)$24.00 - $46.00$3.20 - $5.00

The break-even point is immediate. Even in month one, the Nextcloud + MassiveGRID combination costs less than Microsoft 365 Business Premium alone -- before you add Microsoft's backup and compliance costs. Over three years, the savings range from $136,000 to $295,000 for a 200-user organization.

Why Independent Resource Scaling Matters for Cost Control

One of the critical advantages of hosting Nextcloud on MassiveGRID rather than a hyperscaler is independent resource scaling. With Microsoft 365, costs scale linearly with user count -- every new user adds the full per-user license fee regardless of how lightly they use the platform. A user who checks email once a day costs the same as a power user who lives in Teams and SharePoint.

With MassiveGRID's infrastructure, you scale resources independently: CPU, RAM, storage, and bandwidth each adjust based on actual demand. If your 200-user deployment's primary bottleneck is storage, you add storage without paying for CPU you do not need. If you onboard 50 new users who primarily use Nextcloud Files without heavy office document editing, the infrastructure cost increase is proportional to the actual resource consumption -- not a flat per-seat fee.

This matters especially during growth. Scaling from 200 to 500 users on Microsoft 365 means $79,200 additional annual licensing. Scaling the same on MassiveGRID typically means adding $50-$150/month in infrastructure resources, depending on the usage profile. The per-user economics become more favorable the larger you grow.

What Digital Sovereignty Actually Means at the Infrastructure Layer

The phrase "digital sovereignty" has become a marketing term. Every cloud provider with a data center in Europe now claims to offer it. But sovereignty is a legal and jurisdictional concept, not a geographic one. The distinction matters enormously, and most organizations get it wrong.

The CLOUD Act Problem

The US Clarifying Lawful Overseas Use of Data (CLOUD) Act, enacted in 2018, grants US law enforcement agencies the legal authority to compel US-headquartered technology companies to hand over data stored on their servers -- regardless of where those servers are physically located. This means that data stored on AWS Frankfurt, Azure Germany, or Google Cloud Europe is legally accessible to US government agencies through proper legal channels, without the knowledge or consent of the data subjects.

This is not a theoretical risk. It is the precise legal mechanism that prompted the Schrems II ruling, which invalidated the EU-US Privacy Shield. The subsequent EU-US Data Privacy Framework (DPF) adopted in 2023 attempts to address this, but legal scholars and privacy advocates (including Max Schrems himself) have indicated that it faces the same structural vulnerabilities as its predecessors. A "Schrems III" challenge is widely expected.

For European organizations processing sensitive data -- government records, patient health information, financial data, legal documents -- relying on infrastructure operated by a US-headquartered company creates an unresolvable compliance tension. You can sign Data Processing Agreements, implement Standard Contractual Clauses, and encrypt data at rest. But if the infrastructure operator is subject to US jurisdiction, the legal access pathway exists regardless of your contractual protections.

Running Open-Source Software on US Infrastructure Is Not Sovereignty

This is the mistake many organizations make in their migration planning. They correctly identify Microsoft 365 as a sovereignty risk because it is a US company's SaaS product. They migrate to Nextcloud because it is open-source software developed by a German company. But then they deploy Nextcloud on AWS, Azure, or Google Cloud -- and the sovereignty problem remains at the infrastructure layer.

True digital sovereignty requires all three layers to be free from foreign jurisdictional access:

  1. Application layer: Open-source software with auditable code and no vendor lock-in. Nextcloud satisfies this.
  2. Infrastructure layer: Hosting operated by a company incorporated under European law, with no parent company or controlling entity subject to foreign government access orders. This is where most migrations fail.
  3. Network layer: Data transit paths that do not route through jurisdictions with mass surveillance programs. This requires careful network architecture and peering arrangements.

MassiveGRID's Approach to Infrastructure Sovereignty

MassiveGRID's Frankfurt data center infrastructure is operated under European jurisdiction. Single-tenant Nextcloud hosting means your instance runs on dedicated resources -- not shared infrastructure where multi-tenancy creates additional attack surface and compliance ambiguity. There is no US parent company. There is no foreign government access pathway built into the infrastructure.

This is the specific configuration that satisfies the requirements laid out by the EDPS, the CNIL, and the growing body of European regulatory guidance on cloud sovereignty. It is also the configuration that Schleswig-Holstein, Denmark, and other government entities are moving toward: European software on European infrastructure operated by European entities.

For organizations subject to NIS2, DORA, or sector-specific regulations like HIPAA (for US operations of European companies) or the German KRITIS framework, infrastructure jurisdiction is not optional -- it is a compliance requirement that auditors are increasingly scrutinizing.

Operational Reliability: Control vs. Convenience

The standard argument for Microsoft 365 is operational simplicity. Microsoft handles the infrastructure, the updates, the scaling, and the availability. You just pay the license fee and use the service. This is genuinely convenient -- until it is not.

The Microsoft 365 Outage Problem

Microsoft 365 has experienced significant outages that affected millions of users simultaneously:

The problem is not that Microsoft has outages -- every platform does. The problem is that when Microsoft 365 goes down, you have zero control over the recovery. You cannot call an engineer. You cannot fail over to a standby system. You cannot even get a meaningful ETA. You watch the status page and wait.

For a 200-user organization where collaboration is core to daily operations, a four-hour Microsoft 365 outage represents 800 person-hours of lost productivity. At an average fully loaded cost of $75/hour for knowledge workers, that is $60,000 in a single incident. Microsoft's SLA credits -- when they are applicable -- rarely cover more than a fraction of actual business impact.

Nextcloud on MassiveGRID: High-Availability Architecture

MassiveGRID's high-availability infrastructure is built on clustered Proxmox hypervisors with Ceph distributed storage. This architecture provides automatic failover at the infrastructure level: if a physical server fails, your Nextcloud instance automatically restarts on another node in the cluster without manual intervention. There is no single point of failure at the hardware layer.

This is fundamentally different from both Microsoft's shared-fate SaaS model and from running Nextcloud on a single dedicated server. Key operational advantages include:

The reliability equation is counterintuitive: a properly architected self-hosted platform on high-availability infrastructure is more reliable than a hyperscaler's SaaS offering -- because you eliminate the shared-fate risk where millions of other tenants' problems become your problems.

Migration Path: A Phased Approach That Actually Works

The biggest mistake organizations make when migrating from Microsoft 365 to Nextcloud is trying to do everything at once. A simultaneous cutover of file storage, email, office documents, video conferencing, and calendar is a recipe for user revolt and IT burnout. The organizations that succeed treat it as a phased migration, with each phase mapped to specific infrastructure requirements.

Phase 1: File Storage and Sync (Weeks 1-4)

Start with what Nextcloud does best: file storage, synchronization, and sharing. This phase replaces OneDrive and basic SharePoint document libraries.

Phase 2: Office Document Editing (Weeks 3-6)

Once file storage is stable, deploy Collabora Online or ONLYOFFICE Docs for browser-based document editing. This phase overlaps slightly with Phase 1 to allow testing.

Phase 3: Communication and Video Conferencing (Weeks 5-10)

Nextcloud Talk replaces Microsoft Teams for chat, video calls, and screen sharing. This is typically the most culturally sensitive phase because Teams is deeply embedded in many organizations' daily workflows.

Phase 4: Groupware -- Calendar, Contacts, Email Integration (Weeks 8-14)

The final phase deploys Nextcloud Groupware for calendar, contacts, and task management. Email itself typically remains on a dedicated mail platform (many organizations keep Exchange Online for email even while migrating everything else, or move to a European email provider).

Infrastructure Scaling Across Phases

The phased approach maps directly to MassiveGRID's independent scaling model. Rather than provisioning peak-capacity infrastructure from day one (and paying for idle resources during early phases), you start with a storage-focused configuration and add CPU, RAM, and bandwidth as each phase introduces new workloads. This keeps costs aligned with actual usage throughout the migration.

Migration PhasePrimary Resource NeedSecondary Resource NeedTypical Duration
Phase 1: File StorageNVMe StorageBandwidth4 weeks
Phase 2: Office EditingCPU CoresRAM3 weeks
Phase 3: CommunicationBandwidthCPU Cores5 weeks
Phase 4: GroupwareDatabase I/ORAM6 weeks

Future-Proofing: Why the Long-Term Bet Favors Open Infrastructure

The cost comparison above captures the current state. But infrastructure decisions are made on 3-5 year horizons, and the trajectory of Microsoft 365 pricing versus self-hosted alternatives is moving in only one direction.

Microsoft's Pricing Trajectory

Microsoft increased prices three times in four years. Each increase was presented as modest -- a dollar or two per user per month -- but compounded across hundreds or thousands of users and multiple years, the impact is substantial. A 200-user organization that started on Microsoft 365 Business Premium in 2021 at $20/user/month is now paying $22/user/month -- a 10% increase in three years. That is $4,800 per year in additional cost for exactly the same service.

More significantly, Microsoft's strategic direction is clear: AI features (Copilot) are being positioned as essential productivity tools with aggressive per-user pricing. Organizations that resist paying for Copilot today will face increasing pressure as Microsoft integrates AI capabilities deeper into the core product and potentially gates non-AI features behind higher tiers. The $22/user/month of today could easily become $30-35/user/month within two to three years.

With Nextcloud on sovereign infrastructure, you are not subject to a single vendor's pricing decisions. The Nextcloud software is open-source -- your right to use it cannot be revoked or repriced unilaterally. Collabora and ONLYOFFICE operate in a competitive market where pricing pressure works in the customer's favor. And MassiveGRID's infrastructure costs track with hardware economics (which trend downward over time) rather than SaaS economics (which trend upward).

Scaling from 200 to 2,000 Users

Consider the growth scenario. Your 200-user organization grows to 2,000 users over five years.

On Microsoft 365, this means licensing costs scale linearly: 2,000 users at $22/user/month (assuming no further price increases, which is unrealistic) equals $528,000 per year -- $2.64 million over five years.

On MassiveGRID, scaling from 200 to 2,000 users means adjusting infrastructure resources to handle the additional load. Because Nextcloud is efficiently architected and MassiveGRID's resources scale independently, a 10x user increase does not require 10x infrastructure cost. Typical infrastructure scaling follows a roughly logarithmic curve: doubling users might require 40-60% more resources, not 100%. A realistic estimate for 2,000-user infrastructure on MassiveGRID is $600-$1,200/month -- substantially less than the Microsoft licensing alone.

The total five-year cost at 2,000 users, including Nextcloud Enterprise subscription and Collabora licensing scaled to the larger user base, would be approximately $250,000-$380,000. Compared to Microsoft 365's $2.64 million, that is a savings of over $2 million -- enough to fund an entire IT department.

Regulatory Momentum

The regulatory environment is moving decisively toward sovereignty requirements. NIS2, which applies to essential and important entities across the EU, mandates supply chain security assessments that include evaluating the jurisdictional risks of IT infrastructure providers. DORA imposes specific ICT risk management requirements on financial entities that make reliance on US-jurisdiction cloud providers increasingly difficult to justify to regulators. The German BSI's C5 attestation framework, France's SecNumCloud qualification, and the emerging European Cybersecurity Certification Scheme (EUCS) all point in the same direction: European data on European infrastructure operated by European entities.

Organizations that migrate to sovereign infrastructure now are ahead of the compliance curve. Organizations that wait will eventually face the same migration under regulatory pressure -- but with less time, less budget flexibility, and more disruption to established workflows.

Making the Decision

The comparison between Microsoft 365 and Nextcloud Enterprise on MassiveGRID is not a question of whether one product is "better" than the other in an abstract sense. Microsoft 365 is a polished, feature-rich platform with deep integration across its ecosystem. Nextcloud is a flexible, sovereign-by-design collaboration platform that gives you control over your data, your costs, and your compliance posture.

The question is what your organization values more: convenience managed by a foreign-jurisdiction vendor at escalating cost, or control over a sovereign platform at a fraction of the price.

For European organizations processing sensitive data, operating in regulated industries, or simply wanting to stop sending six-figure annual checks to Redmond for productivity software, the answer is increasingly clear. The governments of Denmark, Germany, Austria, and France have done the analysis and reached their conclusions. The infrastructure to support the same migration for private enterprises is available today.

Explore MassiveGRID's Nextcloud Enterprise hosting to see how single-tenant, sovereign infrastructure can transform your organization's collaboration platform -- with 24/7 human support, a 100% uptime SLA, and costs that scale with your actual usage rather than a vendor's pricing strategy.