Estonia tests Euro alternatives amid Microsoft rollout • The Register

Estonia's government IT agency is walking a tightrope between embracing Microsoft's cloud services and preparing contingency plans for European alternatives, as concerns grow over digital sovereignty and dependence on US technology providers.

Microsoft Migration Underway

Riigi IT (RIT), Estonia's government IT agency, is in the midst of a major cloud migration project, having already moved approximately 8,500 of the country's 25,000 government workstations to Microsoft's centrally-managed cloud computing service. The agency plans to expand this to 15,000 workstations over the next two years.

However, this push toward Microsoft's ecosystem comes with a significant caveat. Ergo Tars, director of RIT, has revealed that the agency is simultaneously trialling European alternatives to US software providers, preparing for a scenario where the European Union might deem American technology products untrustworthy.

The Cost Factor

The financial implications of Estonia's current IT setup are substantial. According to RIT, around €400 of the €2,000 cost for each government agency workstation goes directly to Microsoft in licence fees. This represents a significant portion of the IT budget that could potentially be redirected if viable alternatives emerge.

Despite these costs, Tars remains skeptical about the potential savings from switching to open-source alternatives. He suggests that moving to solutions like LibreOffice or OpenOffice running on Linux would be unlikely to generate substantial savings due to the ongoing need for support, user management, and staff education.

Digital Sovereignty Concerns

Estonia's cautious approach reflects broader concerns across Europe about digital sovereignty and dependence on US technology infrastructure. Tars has been discussing these issues with his counterparts in other European countries over the past year, working to develop a European alternative that could be ready for testing in the second half of 2025.

These concerns extend beyond regulatory action. Data residency is a significant factor, with risks associated with having sensitive government information stored outside Estonia's borders. The country's history of cyberattacks, including the 2007 incident that took down government websites, media services, and cashpoints following a political dispute, has made digital resilience a top priority.

High-Security Holdouts

Not all government departments will be moving to the Microsoft cloud. The higher-security defense, interior (home), and foreign ministries will continue to use alternative solutions, reflecting the sensitive nature of their operations and the need for maximum control over their IT infrastructure.

European Context

Estonia's approach mirrors a broader trend across Europe, where countries and companies are increasingly looking to reduce their dependence on US cloud providers. In December, European aerospace giant Airbus told The Register that it wants to use a cloud provider based in its home continent to support a move away from on-premises applications.

This push for digital sovereignty is gaining momentum across the continent. Countries are investing in technology to develop greater independence from US providers, with some, like France, already announcing plans to replace US videoconferencing tools with sovereign alternatives.

The Data Embassy Strategy

Estonia has taken unique steps to protect its digital infrastructure, including establishing a 'data embassy' – a secure data centre in Luxembourg that serves as a backup for key digital services and datasets. This innovative approach treats digital data with the same diplomatic protections as physical embassies, ensuring continuity of government services even in the face of potential cyberattacks or other disruptions.

Looking Ahead

The dual approach of embracing Microsoft's cloud while preparing European alternatives reflects the complex reality facing many governments today. While the immediate benefits of established cloud services are clear, the long of digital sovereignty and data protection cannot be ignored.

As Estonia continues its migration and simultaneously develops backup plans, it serves as a case study for other nations grappling with similar decisions. The outcome of these efforts could influence how governments across Europe balance the convenience of major cloud providers with the need for digital independence and security.

The situation highlights a fundamental tension in modern IT strategy: the efficiency gains from using established global platforms versus the strategic importance of maintaining control over critical digital infrastructure. Estonia's approach suggests that for many governments, hedging their bets may be the most prudent path forward.