Short answer: Microsoft 365 wins on convenience, Office integration and availability without your own staff. Nextcloud wins on data sovereignty, how cost develops as headcount grows, and the freedom to switch providers. The decision hangs less on features than on whether you have operations in-house or want to buy them in.
This comparison skips the scorecard. Most comparisons online line up feature lists and miss that the two systems solve different problems.
Where Microsoft 365 is clearly ahead
- Office files. Word, Excel and PowerPoint are the benchmark everything else is measured against. Nextcloud integrates Collabora or OnlyOffice; that has become good, but complex Excel files with macros still show a difference.
- No operations needed. Updates, resilience and scaling are priced in.
- Ecosystem. Teams, Exchange, Entra ID and device management interlock. If you use that, you are buying more than file storage.
Where Nextcloud is clearly ahead
- Data sovereignty. You decide where data sits and who has access to the machine. For processing on behalf of public bodies, schools or health data this is often the deciding point.
- Cost curve. A subscription grows linearly with headcount. Your own server grows in steps — the eleventh person costs nothing extra.
- No exit lever against you. Your data sits in a file system, not a proprietary format. That is not a security argument, it is a negotiating one.
- Storage per person. Lots of storage is the expensive part of a subscription and the cheap part of your own server.
The comparison that actually matters: who runs it?
Both systems work. The difference is who does the work when something does not.
With Microsoft 365 you call support. With Nextcloud you need someone with access to the server who knows what they are doing — in-house or contracted. That person is the real cost item, not the software.
So the honest test question is not “which system is better” but: who looks into it when logins stop working on a Friday evening? If nobody has an answer, the answer to the system question is already given.
The middle path many overlook
- Microsoft 365 for mailboxes and Office documents, because that is where habit sits.
- Nextcloud for files with personal data, project storage and exchange with outsiders — the things you would rather not keep in someone else's cloud.
That costs slightly more than a single solution, but it avoids the worst variant: everything in one system that you later have to leave for legal reasons.
What to settle before deciding
- What data arises, and which of it is personal data?
- Is there someone in-house looking after servers — and is that time budgeted?
- How much storage per person do you actually need?
- What happens if you want to switch in three years?
The last question is asked least often and is the most expensive when it comes too late.
Conclusion
If you have operations in-house or will buy them in, and you need data sovereignty, Nextcloud is the right call. If you have neither and Office integration is your daily work, Microsoft 365 is the more honest answer. Everything in between argues for the middle path.
We build and run the Nextcloud side of that equation — see DevOps & Automation. What such a project roughly costs is covered in what self-hosting Nextcloud really costs; the legal side in running Nextcloud under the GDPR.