Digital sovereignty in Switzerland: the controversy around M365

Across the world, the discussions around M365 and its use by public bodies are becoming particularly heated, all the more so in view of recent developments in transatlantic relations. The case of Switzerland is a particularly telling one with a number of red flags that should not be ignored. It is not only M365’s cloud and the business risks it entails that are in the firing line, but first and foremost the risks it poses in terms of digital sovereignty and security more generally. The Swiss Federal Audit Office for one has been warning against working with a single provider for quite a while.

Digital sovereignty can be defined as the ability of governments and organisations to control their IT infrastructure without subjugating themselves to foreign providers and the legislation they are bound by. The issue is that US companies such as Microsoft are expected to comply with the CLOUD Act, which requires them to grant access to data stored on the cloud to American public bodies. However, by doing so, they would violate the EU’s GDPR and the Swiss Federal Act on Data Protection (FADP), meaning that Microsoft services cannot be used in a compliant manner either in the EU or in Switzerland.

Protecting data and ensuring data sovereignty
In the face of this challenge, turning to on-premises software is a safer alternative. When programs are installed locally, users have full control over their data and are less reliant on external providers. It also makes sense financially, as it makes businesses and public bodies less vulnerable to possible price hikes. Such solutions exist, as is the case with Office LTSC 2024, a new Office version that does not have to be connected to the cloud. But apparently, IT decision makers in Switzerland were not aware of its existence. They wrongly believed that Microsoft Office was only available as a cloud solution, which was an unfortunate oversight: instead of selecting on-premise solutions tailored to their needs, they are now considering deactivating M365 services that are included in their subscription fees. This means that they are paying for features they are not allowed to use, which can hardly be cost-effective, can it?

What the ongoing EU anti-trust proceedings against Microsoft mean
In Switzerland, IT decision makers are also following very closely the EU anti-trust proceedings against Microsoft. The European Commission found that Microsoft has been exploiting its dominant position and disadvantaging competitors by bundling Teams and other Office products, why is the competition authorities demanded that Microsoft offer Teams as a stand-alone product. Such a measure is a major step towards preventing vendor lock-in and promoting fair competition, helping businesses and public bodies decide freely which solutions they wish to use instead of being trapped in an expensive subscription comprising the full range of services. This goes to show how crucial alternatives are when it comes to protecting digital sovereignty and how such solutions can curb dangerous situations of dependency on specific providers.

The situation in Germany: a hefty price tag for Microsoft and SAP
In Germany too, professionals have criticised how Microsoft has been weaving its web as well as its high cloud fees that are now compounded by SAP’s own hefty price tag. The latter has now decided it will operate Microsoft services from its own Delos cloud from 2025 onward. It seems that this set-up involving the two tech giants has been encouraged by public stakeholders in order to ensure that the American software solution can be used in compliance with European data protection regulations. But the fact that the public purse is having to take the hit for Microsoft’s legal glitches seems more than absurd. Up to €700 million has been earmarked for Microsoft and SAP services, but do users actually need the M365 cloud features? In practice, public service staff do not use most available features. Instead of pouring money into an expensive set-up combining Delos and Microsoft, a mix of on-premises software and hybrid models would actually be cheaper and more secure.

Drawing up a sustainable, hybrid strategy
Cloud services pose risks in terms of data protection and digital sovereignty, but also financial risks. This should encourage us all to think twice. The Microsoft cloud does not have to be part of our digital future: by turning to hybrid solutions that smartly combine cloud services of various providers and on-premises software, we can reduce our costs and safeguard our sovereignty. There are already some great solutions on the market, such as Office LTSC 2024 or previous versions.

Used software licences are another particularly attractive option. Buying and selling second-hand software licences is legal in Switzerland and in the EU. That offers massive savings while avoiding vendor lock-in. Unlike with the subscriptions Microsoft is trying to force upon their customers, users are free to resell their licences if they want to, thereby reducing the strain on their IT budget.

Out with cloud mania, in with a well-thought-out infrastructure
It is high time for all to have a critical look at their IT strategy and actual cloud needs. By considering all available options, including used software, businesses and public bodies can reduce their costs and mitigate risks in the long run. For Andreas E. Thyen, Chairman of the Board at LizenzDirekt AG, the conclusion is clear: ‘It would be a disaster to build the future of our IT infrastructure on what is obviously an illusion. Switzerland should opt for a sustainable approach to safeguard its digital sovereignty as well as possible.’