From Microsoft 365 to Open Source: The Honest Migration Guide for SMEs.

Why now?

Three things converge in 2026.

The end of Windows 10. Regular support for Windows 10 ended on October 14, 2025. If you are already forced to rethink workstation setup, the larger question is fair game: does the replacement have to recreate the same dependency?

Rising costs. Microsoft 365 licensing has climbed noticeably. New AI features like Copilot are priced on top, and volume discounts are shrinking. What started as a cheap subscription has become a recurring and growing cost center.

Regulatory pressure. GDPR, NIS2, and the EU Data Act all raise the bar on control over your own data. This is where the topic becomes especially relevant for European and Austrian businesses.

More organizations are now responding in a similar way: they want alternatives that are easier to control technically and contractually. Germany’s state of Schleswig-Holstein is migrating its administration with around 25,000 workstations to open source. The core argument: an organization is only truly free in its decisions once it can extract its business data from a vendor environment at any time.

Data protection: why Austria plays a special role here

It is no accident that the legal foundation for this topic has strong Austrian roots.

Viennese lawyer Max Schrems brought down the foundation of transatlantic data transfer not once but twice – Schrems I and Schrems II. The case law that today affects every European company using US cloud services was, in large part, won by an Austrian.

The CLOUD Act does not physically override server location, but it matters legally. If you use Microsoft 365 and select “Austria” or “EU” as your region, data may physically sit in European data centers. That sounds reassuring – but it does not remove the underlying issue: Microsoft is a US company. The CLOUD Act generally requires US providers to produce certain data even when it is stored outside the United States. Microsoft can review and challenge requests, but the legal basis remains.

A data-processing agreement alone is not enough. After the Schrems II ruling, a signed data-processing agreement does not automatically secure international transfers. Additional technical and organizational safeguards are required, such as encryption, permission concepts, and a credible transfer impact assessment.

“EU Data Boundary” is a product and contractual commitment, not European law. Microsoft’s EU Data Boundary is a step in the right direction. But provider jurisdiction and data location remain two different questions.

The fundamental difference: a European provider with seat and control in the EU is subject to European law. If a US authority wants data, the clean route is international legal assistance and European courts. That is not a gradual difference – it is a difference in principle.

For businesses with especially sensitive data – medical practices, law firms, tax advisors, anything holding personal customer data – this is not theoretical. Data sovereignty in 2026 is no longer a political slogan but a concrete legal and organizational requirement.

The three paths: which one fits you?

There is no single “right” way off Microsoft. The decision depends on how deeply the existing tools are woven into your daily work and how much change your team can absorb.

Path 1 – Your own infrastructure

You run the solution on your own hardware: an in-house server or NAS with Nextcloud, Collabora, and Mailcow.

• For: Maximum control. Your data never leaves the building. One-time hardware purchase instead of recurring license fees.
• Against: You carry responsibility for power, backups, updates, and security. Without in-house know-how or a reliable IT partner, this is a real commitment.
• Fits: Businesses with high data-protection requirements, existing technical understanding, or a fixed IT partner.

Path 2 – Managed EU cloud

A European host runs the infrastructure for you – Nextcloud, Collabora, and Mailcow as a managed service in a German or Austrian data center.

• For: Cloud convenience without US legal exposure. Updates, backups, and operations are handled by the provider.
• Against: You hand over some control – to an EU provider rather than a US corporation. Recurring costs remain.
• Fits: Most SMEs that want GDPR compliance but do not want to run a server themselves.

Path 3 – Hybrid

You keep Microsoft 365 or Google Workspace for areas where there is no practical replacement yet – for example Excel for highly complex models – and move sensitive data onto European infrastructure.

• For: Lowest switching effort. You reduce GDPR risk where it is greatest without moving the whole team at once.
• Against: You are not fully independent, and you must document precisely which data sits where.
• Fits: Many SMEs as a realistic entry point. Often the best first step – not the end goal, but a solid start.

Our honest take: For many small businesses, the hybrid path is the most sensible start, and Path 2 the most likely end goal. The big cut all at once fails in practice more often than it succeeds.

Component by component: what replaces what?

The viable migration path is workload-based, not suite-based. You do not replace “Microsoft 365” in one step. You replace each function individually and assess each on its own.

Important on Office compatibility: Collabora Online and OnlyOffice open and save Microsoft formats reliably. They are mature – but they are not identical to Word and Excel. For simple to moderate documents, the difference is small. For extremely complex Excel models with macros, it gets tricky.

On the horizon: Initiatives like Euro-Office and openDesk show that integrated European platforms are emerging. The market is moving fast and in the right direction – but any target system should still be assessed by maturity, support, and the concrete use case.

What is harder than vendors admit

This is the section many migration guides leave out. We do not, because this is exactly where projects fail or turn chaotic.

Two illusions to let go of:

1. The exit is not a weekend project.
2. The exit is also not a revolutionary act. It is clean IT governance, in phases, with parallel operation.

Migration in phases: how it runs cleanly

A solid plan does not just compare features. It tests export paths in practice. Parallel operation is, in most businesses, the better route than the big cut.

1. Inventory. Which Microsoft services do you actually use? Where does which data live? Which contains personal data?
2. Define the target. Which of the three paths? Which component do you replace first?
3. Test export paths. Before anything is migrated, actually export and re-import a small test dataset.
4. Pilot area. One department or small team switches first. Gather experience, adjust processes.
5. Phased rollout. Workload by workload, area by area. Parallel operation where needed.
6. Training & support. Bring the team along – otherwise all the technology was for nothing.

What does it really cost?

Honest answer: the one-time migration is real work and costs real money. Ongoing operation is often significantly cheaper afterwards and, more importantly, more predictable.

For a small business of 5 to 20 people, absolute figures are much lower than in large organizations. The decisive point stays the same: no per-account suite license when you move to your own or managed open-source infrastructure. With Nextcloud, you pay for storage, operation, and support – not automatically the same suite surcharge for every additional person.

On top of that come the softer benefits that matter at the next audit: auditability, reduced vendor lock-in, and the certainty that you can extract your data at any time.

The next step

Migrating away from Microsoft 365 is doable. The tools are mature, the legal tailwind is real, and the market is moving in your direction. But it does not run itself. The question is no longer whether it works, but for which workloads the switch is practical, economical, and organizationally clean for your business.

That is exactly what we work out together.

Legal basis & further reading

• Microsoft Lifecycle: Windows 10 Home and Pro
• CJEU, C-311/18, Schrems II
• US CLOUD Act
• GDPR
• NIS2 Directive
• EU Data Act