The EU is big enough that companies like Microsoft will find a way to offer their services legally, and if they wouldn't, it would be a huge opportunity to EU based competitors. It's not like we don't have any software companies in the EU.

Also, there's no reason that collaboration tools must be hosted on a US cloud. Especially Microsoft traditionally provided tools for their customers to host their own infrastructure -- it's only a recent phenomenon that everything is hosted by the vendor themselves.

Or people get fed up with cloud companies like Google (already happening) and people realize self hosting is becoming more and more simple (also happening) to the point where anyone can do it. IPFS and other tooling could push a decent portion of users to this. We can already see some of that effect with things like mastadon.

You can host this on-site :)

No need to go cloud everything. I think you can even buy the whole azure pack to run on-site.

Do you genuinely think they're the only office products providers in the world?