Executive Summary: Canton of Bern Extends Microsoft Contracts Worth 27 Million Swiss Francs
1. Executive Summary
The Canton of Bern is extending its Microsoft 365 licenses for three years through direct procurement worth 27 million Swiss francs, claiming that no functionally and economically viable alternative exists. This decision highlights the growing dependency of public administrations on US tech giants and raises questions about digital sovereignty and vendor lock-in issues. The procurement is being conducted without public tender through the Office of Information Technology and Organization (KAIO).
2. Core Issue & Context
Main Topic: Direct extension of Microsoft licenses by a Swiss cantonal government without public tender.
Context: This decision fits into a European trend where public administrations are becoming increasingly dependent on Microsoft products. At the same time, criticism is growing regarding the lack of digital sovereignty and data protection concerns with cloud solutions from US providers. The EU and various European countries are increasingly discussing digital sovereignty and alternative solutions to American tech corporations.
3. Key Facts & Figures
- Contract value: 27 million Swiss francs over 3 years
- Duration: M365 has been in use for one year (since 2024)
- Procurement method: Direct award (without tender)
- Justification: "No functionally and economically viable alternative"
- Responsible authority: Office of Information Technology and Organization (KAIO)
- Original decision: Made by the Executive Council in 2023
Fact-checking: The information is plausible, but detailed cost breakdowns and comparative analyses of alternatives are missing.
4. Stakeholders & Those Affected
| Stakeholder | Position/Interest | Potential Conflicts | |-------------|-------------------|---------------------| | Canton of Bern/KAIO | Operational efficiency, continuity | Dependency vs. sovereignty | | Microsoft | Market dominance, revenue stability | Monopoly allegations | | Taxpayers | Cost efficiency, transparency | Non-transparent procurement | | Alternative providers | Market access | Exclusion from tender process | | Data protection advocates | Data sovereignty | US cloud vs. EU data protection |
5. Opportunities & Risks
Opportunities:
- Operational continuity without migration disruptions
- Proven functionality and user acceptance
- Cost planning certainty over 3 years
Risks:
| Risk | Assessment | Impact | |------|------------|---------| | Vendor lock-in | HIGH | Long-term dependency | | Price increases | MEDIUM | Budget pressure | | Data protection/sovereignty | HIGH | Legal/political issues | | Outages/disruptions | MEDIUM | Operational interruptions |
6. Action Relevance & Recommendations
For public administrations:
- Develop exit strategy: Parallel evaluation of alternatives (open source, European providers)
- Increase transparency: Publish detailed cost analyses and alternative assessments
- Data protection compliance: Regular review of GDPR conformity
For IT service providers:
- Leverage market opportunity: Develop competitive alternatives to M365
- Partnerships: Collaborate to create comprehensive office solutions
7. Short-term Forecast
Medium-term (1-3 years): Further consolidation of Microsoft's dominance in the public sector, but growing political pressure for alternatives.
Long-term (3-5 years): Possible regulatory interventions or increased promotion of European/open-source alternatives through EU digital sovereignty initiatives.
8. Sources & Additional Links
- Primary Source: Inside IT - Bern pays 27 million francs for Microsoft
- EU Digital Sovereignty: European Digital Sovereignty
- Swiss E-Government: eGovernment Switzerland
- Microsoft 365 Government: Microsoft 365 for Public Administration
- Open Source Alternatives: OSBA - Open Source Business Alliance
Analysis based on available information. Recommendation: More detailed cost transparency and alternative assessment by the Canton of Bern.