Federal State of Schleswig-Holstein Embraces Open Source

The return of Donald Trump to the White House highlights the dangers of Europe’s digital dependence on the United States. It is well known that businesses and public institutions that rely on cloud services from major US providers are exposing themselves to significant data protection and financial risks. Now, Schleswig-Holstein is leading the way as the first federal state to demonstrate what a viable alternative might look like. “Being trapped in software ecosystems of major, especially non-European, providers is not only a threat to our security, but also stifles the growth of our digital economy,” said Schleswig-Holstein’s Minister for Digitalisation, Dirk Schrödter, in a statement to BILD. “We can achieve digital sovereignty by adopting open-source systems.”

Dangerous Entanglements: The Ties Between Tech Giants and Politics

Digital sovereignty means more than simply retaining control over one’s own data and digital processes or freely choosing which technologies to use. It also involves preserving strategic independence, and ensuring the rule of law and the protection of fundamental rights in the digital realm.

Due to the increasingly close ties between the tech industry and politics, these risks have taken on a new dimension. Many of the major US tech firms court favour with the President in pursuit of strategic advantages. Mark Zuckerberg, for instance, abruptly discontinued fact-checking on Facebook and described the EU’s digital regulatory framework as “censorship.” In a podcast interview, he called on the US government to defend the American tech sector against the enforcement of EU digital rules. The European Commission has so far remained unfazed, imposing fines totalling €700 million on Meta and Apple for breaches of the Digital Markets Act.

Schleswig-Holstein Paves the Way Out of the Cost Trap

The European Commission’s threat to impose a digital tax on American providers may prove less intimidating to the tech giants than expected—and could even backfire. Companies such as Microsoft, Google, and Amazon have already shown a willingness to simply pass any additional costs on to customers through higher subscription and licensing fees. Microsoft, for example, has repeatedly increased its M365 prices since 2022 and has announced further drastic hikes—up to 40%—for April 2025.

These steep licensing costs are one of the key reasons why Schleswig-Holstein has decided to replace Microsoft Office with the open-source software LibreOffice from November. The plan is to follow this with a transition from Exchange to Open-Xchange, and from Windows to Linux. Unlike states such as Bavaria—and even the federal government—which increasingly rely on cloud services like Microsoft 365, Schleswig-Holstein is choosing a path towards digital sovereignty. In recent years, licensing costs for Microsoft products within the federal administration have skyrocketed, reaching nearly €205 million in 2024.

In addition to financial risks, there are serious data protection concerns. Under the US CLOUD Act, American companies are legally required to grant US authorities access to cloud-stored data—even if that data falls under GDPR regulations. The political climate across the Atlantic is placing significant pressure on these companies.

Reclaiming Digital Sovereignty Through a Hybrid IT Strategy

Hyperscalers have a vested interest in pushing customers into subscription models, thereby increasing digital dependency. Once software is no longer owned but merely rented, applications can only be used for as long as the subscription is maintained. Providers can then tighten the screws at will—raising prices or changing licensing terms arbitrarily. IT decision-makers should therefore carefully evaluate which cloud services are truly necessary, and where on-premises solutions might still be the better option. Traditional perpetual licences are paid for once and can then be used without restriction. Even Microsoft still offers new software as on-premises versions, such as Office 2024 LTSC or Windows Server 2025.

A hybrid approach, combining cloud services with on-premises software, is advisable. In this model, critical data and applications remain under internal control, while the cloud is used selectively for tasks that require flexibility and scalability. A “bring your own licence” model allows organisations and public bodies to determine which software they run on which cloud infrastructure. This not only avoids vendor lock-in and increases autonomy, but also helps reduce costs over the long term.

An Escape from the Sovereignty Dilemma

The decision by Schleswig-Holstein’s state government to break free from monopoly-style providers in the US is both bold and strategically significant. It shows that there is a way out of the digital sovereignty dilemma—for those willing to pursue it. One can only hope that many others will follow this example. The risks were already apparent before the recent trade disputes, and a shift in IT strategy has long been overdue. For over a decade, I have been tirelessly warning, across various media, of the immense danger businesses and public institutions face from one-sided dependence on US tech giants. In light of current developments, the wake-up call should now be clear to everyone. Adopting a hybrid model, and combining the advantages of (used) on-premises licences with a scalable cloud infrastructure—preferably from European providers—is an active step towards greater reliability and both strategic and financial digital sovereignty.

Andreas E. Thyen

President of the Board of LicenceDirect