A European alternative to M365? Nextcloud looks to capitalize on digital sovereignty interest

Digital sovereignty has been an ongoing concern for European organizations that use cloud computing services but want to retain control over their data and infrastructure. Recent geopolitical and trade tensions have only intensified those concerns, prompting European cloud customers to reassess their investments in US-owned cloud providers.

Nextcloud, a German productivity and collaboration software vendor, hopes to capitalize on the shift in mood. Working with Ionos, a German data center hosting company, Nextcloud plans to launch an open-source service that it bills as a digitally sovereign competitor to better-known US software-as-a-service (SaaS) products like Microsoft 365 (M365).

Nextcloud, which launched in 2016, already develops and sells a suite of collaboration and productivity tools called Nextcloud Hub, which includes apps for document editing, email, and video meetings. It also has an AI assistant that’s accessible in various apps. 

Nextcloud Hub can be downloaded and accessed for free by individuals under an open-source license, though the company offers a paid service for larger organizations. Nextcloud said it has around 1,500 customers for the latter, which includes enterprise support and additional features. Typically, enterprise customers install Nextcloud Hub on their own infrastructure or pay a third-party data center provider to host the application suite. (Nextcloud doesn’t provide hosting services itself.)

What has been lacking from its product delivery options, according to Nextcloud CEO and cofounder Frank Karlitschek, is a “turnkey solution” that simplifies adoption for large organizations.

Nextcloud CEO and cofounder Frank Karlitschek
Nextcloud

“So far, the question was: do I go to an easy-to-use SaaS product like Microsoft and Google, or do I have this open-source, locally running alternative like Nextcloud Hub?” he said. Deploying Nextcloud Hub can require significant efforts from customers, with evaluation, proof of concepts, price negotiations, and consulting — “a lot of manual work, basically,” said Karlitschek. 

The company created Nextcloud Workspace to remove some of the barriers to adoption and bring its suite in line with the likes of M365 and Google Workspace, said Karlitschek. “Now, we basically have the best of both worlds: we have a super easy-to-use SaaS product, but it is completely European,” he said.

Pricing for Workspace, set to launch Nov. 4, has not yet been announced. But Nextcloud vowed to provide a service that’s comparable to US cloud providers in terms of cost and structure and said it will offer it as a subscription on a per-user basis. Nextcloud will provide software patches and updates that are installed by Ionos, and Ionos will manage servers and data backups. 

A migration away from popular suites such as Google Workspace or M365 would be no small feat, and it’s not yet clear how easy it might be to adopt Nextcloud’s Workspace. But European customers are more motivated than ever to find alternatives to US providers, according to Karlitschek. 

He cited several reasons, including concerns among European organizations that access to cloud services hosted by US vendors could be shut down for political reasons, such as leverage in tariff negotiations. There’s also the prospect that US tariffs on physical goods could be extended to digital services in the future, with European cloud customers locked into their existing suppliers.

Nextcloud Hub includes  apps for document editing, email, and video meetings.
Nextcloud

“There was a huge wakeup call in Europe — several, actually — from the Trump re-election, and then, of course, all the drastic things that happened once he was in power: the tariffs, the uncertainty with NATO, the uncertainty with Ukraine. There’s a huge, huge amount of uncertainty in Europe [around] how reliable the US is.”

In recent years, large cloud providers such as Amazon Web Services, Google, and Microsoft (who account for 70% of cloud infrastructure revenues in Europe, according to Synergy Research) have sought to reassure European customers; they’ve setup local data centers to provide infrastructure and application services and rolled out policies to ensure data stays local.  

Microsoft, for example, in April reiterated its commitment to protect European customers’ data, promising to resist any government demands to suspend services in the region. It also introduced a Data Guardian service it said will ensure that only Microsoft staff residing in European countries can access customer data. And it launched Microsoft 365 Local, essentially a version of Microsoft’s cloud productivity apps that can be installed locally on a customer’s own servers.

Yet many European organizations are still worried that the US Cloud Act and the US Foreign Intelligence Surveillance Act (FISA) could enable access to sensitive corporate data.

The No. 1 driver for sovereign cloud services in Europe is “protection from extraterritorial data requests,” said Rahiel Nasir, research director, European Cloud Strategies, and lead analyst, Worldwide Digital Sovereignty, at IDC.

A recent IDC Europe survey on worldwide digital sovereignty found that many European cloud customers are placing much greater priority on control over their data and infrastructure. Compared with 2024, around 45% of organizations surveyed in Europe said interest in implementing digital sovereignty solutions has grown because of a host of recent geopolitical uncertainties — from trade tensions to regional conflicts and regulatory shifts.

“When we’ve asked organizations, ‘Are you interested in implementing digital sovereignty solutions because of all the unrest you’ve seen in 2025?’ the answer is, ‘Yes, we are.’ There’s more interest in that,” said Nasir. 

Nextcloud’s Mail offering looks to compete with similar apps from Microsoft and Google.
Nextcloud

That said, many European organizations will likely continue with their existing mix of global and local cloud providers, the IDC Europe survey indicated. Less than 5% said they will stop using services and platforms from global public cloud vendors and only partner with local cloud service providers. 

“Despite all the hype, Europe is not abandoning the US providers in droves,” said Nasir. “The data shows there are changes, for sure. It has impacted [European customers]; they are reassessing their cloud decisions and who they partner with. But it isn’t night and day. There’s a small shift away from them, not a huge shift.”

Karlitschek is confident that situation will soon change. 

He claims a threefold increase in requests for Nextcloud’s existing tools compared to last year, a shift he attributes to concerns over digital sovereignty — though that interest has yet to translate to actual deployments. “Lots of these projects are longer running, so we don’t really see this in actual installations, yet. 

“But the appetite is definitely there — there’s movement in this direction,” he said.A European alternative to M365? Nextcloud looks to capitalize on digital sovereignty interest – ComputerworldRead More