Dusseldorf Circular folders, reference works for ordinances and laws, plus a PC with Word and Excel: Microsoft programs are part of the standard equipment of German authorities. The federal administration alone paid the group 205 million euros for software, server services and maintenance last year, plus the federal states and municipalities.
Frank Karlitschek wants to stir up these relationships. 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, for economic reasons – his company Nextcloud has been offering office software itself since December, with which customers can edit texts, tables and presentations.
What Nextcloud generates in sales 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’s why the manager wants to make the program package known through word-of-mouth propaganda: A new advisory board with representatives from several European governments, municipalities and state IT service providers is to formulate the requirements of the public sector and at the same time bring the project to the public.
Top jobs of the day
Find the best jobs now and
be notified by email.
“Software must be continuously developed, and the advisory board should help with this,” Karlitschek told Handelsblatt in an interview. This applies to the functions as well as the usability. An important motivation is also to do advertising. “I want to create a broad awareness that there are alternatives to Microsoft – that’s often doubted.”
It is no coincidence that the initiative is now starting: A discussion about digital sovereignty has flared up in Europe. There is uncertainty as to whether US providers’ cloud services comply with the EU’s General Data Protection Regulation. There is also growing awareness of the growing dependence on the tech giants. A market is emerging for companies like 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 in the Nordic state are faced with the question of how to replace Skype for Business if Microsoft is phasing out maintenance for the communications program.
The entrepreneur describes himself as a software activist.
(Photo: Nextcloud)
Teams, which Microsoft is marketing as a successor, is out of the question, says Daniel Melin, who works on IT and cloud strategy at the Swedish Finance 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 last year to look for alternatives. “It’s not good to be the customer of a monopolist or oligopolist,” the strategist emphasizes.
The analysis revealed that around 30 companies fulfill the file sharing, collaboration and office software functions. “However, many market players only represent part of the platform,” says Melin. “Companies have to work together more, so they can develop much better solutions.” One David alone cannot beat Microsoft’s goliath.
The Swedish authorities hope that their tenders will 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. Several companies then changed their plans and founded partnerships.
“bet on the future”
Melin has joined the Nextcloud Advisory Board. From the customer’s 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.One and the city of Geneva.
Nextcloud has made a name for itself with online storage and collaboration software, such as chat and video conferencing. 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-digit sum will be invested, especially for personnel.
>> Read also: SAP and machine builders build cloud platforms for industry
The entrepreneur hopes that this will enable Nextcloud to break into Microsoft’s virtual monopoly. He does not make any concrete forecasts, but postulates: “Our goal is to win part of the market in the public sector.” The company has 30 to 40 customers from administrations and ministries, ten use the office software package.
Despite the cooperation, it remains an unequal fight with Microsoft. In addition, a consortium of SAP and Arvato is to set up a cloud platform for the German administration on which services such as Office 365 and Azure can continue to run in compliance with data protection in the future. The Microsoft programs will therefore not disappear in the offices anytime soon. The new providers need staying power.
More: Limits to data storage: Tech giants are building “sovereign” cloud services