I get the appeal of moving away from Microsoft, but in my experience, Nextcloud is extremely bloated even for personal self-hosting. I wonder how well it will scale in a government setup.
I think it also depend if you only use it to sync and share files or if you want to use the included web apps.
But to be honest office 365 also struggle at times when using the web version of the office tools. Last week I had to do reporting on a small excel document with 4 sheets, the biggest one having less than 30 lines and 6 column and every time I had to insert a line it took 5 to 10 seconds for that line to appear and the whole excel web app was unresponsive until it appeared.
I think it's the other way around. I agree that NextCloud is overkill for personal use, but it does feature a ton of bell and whistles that become useful at larger scales.
But to be honest office 365 also struggle at times when using the web version of the office tools. Last week I had to do reporting on a small excel document with 4 sheets, the biggest one having less than 30 lines and 6 column and every time I had to insert a line it took 5 to 10 seconds for that line to appear and the whole excel web app was unresponsive until it appeared.