End to end encryption is not enough
“Most SaaS solutions do not yet offer true end-to-end encryption that would prevent the provider from accessing plaintext data”
I sincerely hope that doesn't mean that if/when Microsoft does enable full end to end encryption in M365, that the Swiss government would then start using it for confidential government data.
The fact that the Swiss government is talking about end-to-end encryption rather than zero trust is a bad sign.
All end to end encryption does is prevent the data from being decrypted in transit. The SAAS recipient, in this case Microsoft, still has access to the unencrypted data.
People aren't concerned about Windows Recall because they're worried about man in the middle attacks, they're worried that Microsoft will have access to their data. Even with end to end encryption, Microsoft could still access M365 data. There can be all sorts of legalities stopping them, and internal processes, but physically, Microsoft employees could access the M365 data.
Unless they're committing to zero trust systems, I wouldn't trust any SAAS vendor. And I'd only trust them with zero trust because, by definition, zero trust assumes they can't be trusted.