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Is it possible to replace Microsoft 365 with open source alternatives in government sectors?
Schleswig-Holstein has achieved a significant milestone in IT infrastructure management. The State Chancellery confirmed that 80% of administrative workstations now run on LibreOffice, effectively replacing Microsoft 365. This move is not merely a technical swap; it is a calculated execution of “Digital Sovereignty.” By reducing reliance on proprietary vendors, the state gains control over its data and software ecosystem.
Digitalization Minister Dirk Schrödter provided the year-end assessment. He noted that across all departments—excluding tax administration—Microsoft Office and Outlook are largely removed. The new licensing usage rate for proprietary software has dropped below 10% in these sectors. This decisive action proves that large-scale migration from dominant market players is operationally feasible.
Financial Implications and ROI
The economic impact of this transition is immediate. The State Chancellery reports savings of over €15 million in licensing fees. While the state anticipates a one-time investment of €9 million in 2026 to finalize the migration and develop the open-source infrastructure, the long-term financial trajectory remains positive.
This cost-benefit analysis becomes increasingly relevant as Microsoft announces price increases for July 2026, driven by AI feature integration. Organizations locked into proprietary ecosystems face uncontrollable cost escalations. Schleswig-Holstein effectively insulates its budget from these external pricing pressures by adopting a license-free model.
The Divergent Approaches: Bavaria vs. The North
A sharp contrast exists within German IT strategy. While Schleswig-Holstein pursues open-source independence, Bavaria is finalizing a multi-billion-euro contract to entrench Microsoft 365 across its agencies. This mirrors the historic reversal in Munich, where the city previously abandoned its “LiMux” open-source project to return to Microsoft.
Conversely, the Austrian Armed Forces align with Schleswig-Holstein, having recently completed their transition to LibreOffice to eliminate dependencies. These diverging paths highlight a critical choice for CIOs: prioritize the convenience of established ecosystems or invest in the long-term autonomy and cost-efficiency of open standards.
Addressing the Final 20%: The Technical Reality
Migration is rarely absolute. Approximately 20% of the 30,000 workstations in Schleswig-Holstein retain Microsoft applications. This retention occurs primarily where specialized workflows rely on specific technical dependencies, such as complex Excel macros or legacy software integration.
However, the state has defined clear adaptation pathways for these remaining nodes. The strategy involves integrating open-source solutions into these specialized procedures over the coming months. Even the tax administration, a historically rigid sector, is pursuing joint solutions within the state government network to phase out Microsoft Office eventually.
Beyond Word Processing: The Email Infrastructure
The migration extends beyond document editing. Schleswig-Holstein successfully moved nearly 44,000 email accounts to Open-Xchange. This comprehensive approach underscores that digital sovereignty requires a full-stack replacement strategy.
Advisor Takeaway
Schleswig-Holstein demonstrates that breaking vendor lock-in is achievable with political will and technical discipline. While companies like Airbus struggle to exit the Microsoft ecosystem due to deep-rooted dependencies, this German state proves that a phased, methodical migration yields substantial fiscal and operational rewards. For organizations evaluating their IT roadmap, this case study serves as proof that open-source alternatives are enterprise-ready.