Microsoft 365 is the path of least resistance for most organisations. It works out of the box, everyone already knows it, and the IT department does not have to maintain anything. Those are real advantages. But they come with trade-offs that are worth understanding before signing a multi-year agreement.
The Dependency You Are Accepting
When you run your business on Microsoft 365, you are accepting a specific set of conditions:
Microsoft sets the price. Per-user licensing has increased significantly over the past few years and will continue to do so. Your annual costs scale directly with headcount, and you have no leverage in that negotiation.
Microsoft controls the feature set. Functions you rely on can be modified, deprecated, or moved to a higher pricing tier. The product roadmap is driven by Microsoft’s commercial interests, not yours.
Microsoft holds your data. Practically speaking, your files live in Microsoft datacentres. Where exactly depends on your plan and configuration. For many organisations, this is fine. For those with strict data residency requirements — healthcare, legal, public sector, companies operating under German or Finnish data protection expectations — it requires careful verification and ongoing documentation.
Foreign law applies. Microsoft is a US company. Regardless of where your data is physically stored, US law — including CLOUD Act provisions — can apply to data held by US-based providers. This is a real compliance consideration for European businesses.
What Nextcloud Offers Instead
Nextcloud is an open-source collaboration platform that covers the same functional territory as Microsoft 365: file storage and sync, document editing (via Collabora Online or OnlyOffice), calendar, contacts, video conferencing, and team chat. The difference is that it runs on infrastructure you control.
This means:
- Your data stays where you put it. On your own servers, or in a colocation facility you have contracted directly.
- No per-seat pricing. The licence cost for Nextcloud Enterprise is based on the installation, not headcount. For organisations above a certain size, the economics shift substantially in favour of self-hosting.
- You control the update cycle. You apply updates on your own schedule, with testing, rather than having changes pushed to you without warning.
- The software is auditable. Because Nextcloud is open source, the code can be reviewed. You are not trusting a black box.
Where Microsoft 365 Still Wins
This is not an argument that Nextcloud is always the better choice. It is not.
Microsoft 365’s integration with the Windows ecosystem is genuinely hard to match. Teams, Exchange, SharePoint, and Active Directory work together in ways that take real effort to replicate. If your organisation runs a Windows-heavy environment and is already deeply integrated into the Microsoft stack, switching to Nextcloud involves significant migration effort and ongoing operational investment.
Nextcloud also requires someone to maintain it. That might be internal IT staff, or a managed service provider like TechWise. Either way, it is not zero-effort. If you have no interest in managing infrastructure and your data residency situation is uncomplicated, Microsoft 365 may genuinely be the right choice.
When Nextcloud Makes More Sense
Nextcloud tends to be the better fit when:
- Data residency is non-negotiable. You need files to stay within a specific jurisdiction, under specific operational control, and you need to be able to demonstrate that.
- GDPR compliance needs to be airtight. Keeping data on infrastructure you own and operate in the EU is the cleanest possible compliance story.
- Cost predictability matters long-term. At sufficient scale, the economics of self-hosting are substantially more favourable than per-seat SaaS.
- You have on-premises infrastructure already. Adding Nextcloud to an existing server environment is significantly cheaper than starting from scratch.
- You serve clients who require it. Some public sector and enterprise clients require that their suppliers keep data on EU infrastructure with documented control. Self-hosting lets you make that promise cleanly.
The Operational Reality
Self-hosting Nextcloud is not complicated, but it is not trivial either. A well-run installation needs:
- Initial architecture and sizing done correctly
- Proper backup strategy with verified restores
- Regular security updates applied reliably
- Monitoring to catch issues before users notice them
- Someone available when things go wrong
This is exactly what TechWise provides for our Nextcloud clients. We have been deploying and operating Nextcloud since 2021, and we handle the operational side so that our clients can focus on using the platform rather than maintaining it.
If your organisation is evaluating whether self-hosted Nextcloud is the right fit, we are happy to talk through the specifics of your situation — no obligation, just a practical conversation. Also read about what a Nextcloud migration looks like in practice and why Finland is a smart choice for European cloud infrastructure.