Circular folders, reference books for regulations and laws, plus a PC with Word and Excel: the programs from Microsoft are standard equipment of the German authorities. Last year, the federal administration alone transferred 205 million euros to the Group for software, server services and maintenance, in addition to the federal states and municipalities.
Frank Karlitschek wants to shake up these conditions. On the one hand, out of conviction – the computer scientist describes himself as a software activist who fights for open program codes and against large IT corporations. On the other hand, out of economic interest – his company Nextcloud has been offering office software itself since December, with which customers can edit texts, spreadsheets and presentations.
What Nextcloud generates in terms of revenue over the year – a single–digit million sum – is a rounding error in Microsoft’s budget. Karlitschek does not have large marketing budgets like the IT giant.
That is why the manager wants to make the program package known through word-of-mouth propaganda: a new advisory board with representatives of several European governments, municipalities and state IT service providers should formulate the requirements of the public sector and at the same time bring the project to the public.
“Software must be continuously further developed, and the Advisory Board should help with this,” Karlitschek tells Handelsblatt in an interview. This applies to the functions as well as the usability. Another important motivation is to advertise. “I want to create a broad awareness that there are alternatives to Microsoft – this is often doubted.“
It is no coincidence that the initiative is starting now: a discussion about digital sovereignty has flared up in Europe. There is uncertainty as to whether the cloud services of US providers comply with the EU’s General Data Protection Regulation. In addition, there is a growing awareness of the growing dependence on the technology giants. A market is emerging for companies such as Univention or Dataport, Nextcloud and Collabora – often together.
Sweden as a pioneer
The impetus for the new Nextcloud Office software package does not come from Karlitschek’s home country of Germany, but from Sweden. Several authorities of the Nordic state are faced with the question of how they can replace Skype for Business if Microsoft lets the maintenance for the communication program expire.
Teams that Microsoft markets as successors are out of the question, says Daniel Melin, who works on the IT and cloud strategy in the Swedish Financial and Tax Administration. On the one hand, this is due to data protection, but also to concerns about excessive dependencies. A working group of the authorities therefore began the search for alternatives last year. “It’s not good to be a client of a monopolist or oligopolist, ” the strategist emphasizes.
The analysis showed that about 30 companies perform the functions of file exchange, collaboration and office software. “However, many market players only represent part of the platform,” says Melin. “Companies need to work together more, so they can develop much better solutions.“ Against the Goliath Microsoft, a David alone is not enough.
The Swedish authorities hope that with their tenders they will be able to change the market. “We promise the suppliers: if you develop products according to our requirements, we will also buy them. There is money on the table,“ Melin told Handelsblatt. As a result, several companies would have changed their plans and established partnerships.
“Bet on the future”
Melin has joined the Advisory Board of Nextcloud. From a customer perspective, he wants to ensure that the requirements of the Swedish authorities are taken into account in the development, says the IT specialist. This is not a preliminary decision: “If the company develops a great product, we have more choice,” says Melin. Other members are the German IT service provider Komm.And the city of Geneva.
Nextcloud has made a name for itself with online storage and collaboration software, for example for chats and video conferences. The source code is disclosed according to the open source principle, which should strengthen trust.
Since last year, the company has also been marketing a program package with office software – this comes from a partnership with the company Collabora. Similar to Office 365 or Google Workspace, users can exchange files and edit documents together, chat and hold video conferences.
Teams in both companies continue to develop the product. This is “a strategic investment and a big bet on the future,” emphasizes Karlitschek. A seven-figure sum will be invested, especially for personnel.
The entrepreneur hopes that this will allow Nextcloud to penetrate the quasi-monopoly of Microsoft. He does not give concrete forecasts, but postulates: “Our goal is to win a part of the market in the public sector.“ The company has 30 to 40 customers under administrations and ministries, ten use the office software package.
Despite the collaborations, it remains an unequal battle with Microsoft. In addition, a consortium of SAP and Arvato is to build a cloud platform for German obsolescence, on which services such as Office 365 and Azure can continue to run in compliance with data protection in the future. In the offices, therefore, the Microsoft programs will not disappear so quickly. The new providers need a long breath.