Summary
Microsoft has decided to unbundle Teams from the Microsoft 365 and Office 365 suites, a move that is in response to the European Commission's competition concerns about the bundling approach.
What does "unbundling" Teams from Microsoft 365 mean?
This unbundling means that from October 2023, these suites will be available at a reduced price, without Teams included, potentially lowering the financial burden on organisations that do not utilise Teams or use its alternatives like Slack or Zoom.
What geographies are affected?
EEA and Switzerland. Other countries may continue business as usual.
Why is Microsoft doing it?
The reason is probably that Microsoft is trying to proactively address what the European Commission sees as unfair competition practices. We don't even have to guess. Let us quote the original announcement:
"Last month, the European Commission announced that it had opened a formal investigation regarding Microsoft's bundling of Microsoft Teams with Microsoft 365 and Office 365 suites for business customers. As we said at the time, "we will continue to cooperate with the Commission and remain committed to finding solutions that will address its concerns."
"Today we are announcing proactive changes that we hope will start to address these concerns in a meaningful way, even while the European Commission's investigation continues and we cooperate with it."
What are the competition concerns, in simple terms?
Simply put, if I get Teams "for free" in a Microsoft 365 bundle, why would I pay for a competing product? If I am keen to use a competing product, why would I pay the fee share for Teams in my Microsoft 365 bundle? (You didn't think it was really "free", did you?)
What Microsoft 365 bundles are affected?
All Microsoft 365 plans are affected, but not all are affected in a similar manner.
Microsoft 365 plans | New clients | Existing subscribers |
|---|---|---|
Office 365 E1/E3/E5, Microsoft 365 E3/E5 | New clients will only be able to purchase these plans without Teams. | Existing subscribers may renew their subscriptions that include Teams or switch to new EEA plans. |
Office 365 F3, Microsoft 365 F1/F3 | You can choose between plans with and without Teams. | You can choose between plans with and without Teams. |
Microsoft 365 Business Basic/Standard/Premium | You can choose between plans with and without Teams. | You can choose between plans with and without Teams. |
What if you want to add Teams back?
As per the licensing announcement, the price will be €5.00 per user per month.
It's a flat fee across all plans.
How much less will the unbundled plans be?
Microsoft 365 for Enterprise plans
Enterprise plans received a flat €2.00 price decrease.
Plan | Old price | New price | Difference | With Teams | Budget increase with Teams |
|---|---|---|---|---|---|
Office 365 E1 EEA (no Teams) | €9.40 | €7.40 | €2.00 | €12.40 | 32% |
Office 365 E3 EEA (no Teams) | €25.10 | €23.10 | €2.00 | €28.10 | 12% |
Office 365 E5 EEA (no Teams) | €41.50 | €39.50 | €2.00 | €44.50 | 7% |
Microsoft 365 E3 EEA (no Teams) | €37.70 | €35.70 | €2.00 | €40.70 | 8% |
Microsoft 365 E5 EEA (no Teams) | €59.70 | €57.70 | €2.00 | €62.70 | 5% |
Microsoft 365 for Frontline workers and Microsoft 365 Business
Frontline workers and Business plans are less affected because the choice between bundled and unbundled plans remains for all.
However, you must make a strategic decision when you renew your Microsoft Enterprise Agreement or go for a long CSP subscription. Why? Because if you later decide that you need Teams, it will cost you dearly. If you are undecided, our advice is to keep procuring these plans with Teams.
Plan | With Teams | Without Teams | Difference | If you decide to add Teams later | Budget increase if you choose to add Teams later |
|---|---|---|---|---|---|
Microsoft 365 F1 | €2.10 | €1.60 | €0.50 | €6.60 | Better to buy additional subscriptions |
Office 365 F3 | €3.70 | €3.20 | €0.50 | €8.20 | Better to purchase additional subscriptions |
Microsoft 365 F3 | €7.50 | €7.00 | €0.50 | €12.00 | 60% |
Microsoft 365 Business Basic | €5.60 | €4.60 | €1.00 | €9.60 | 71% |
Microsoft 365 Business Standard | €11.70 | €9.70 | €2.00 | €14.70 | 26% |
Microsoft 365 Business Premium | €20.60 | €18.60 | €2.00 | €23.60 | 15% |
Does it help address competition concerns?
Legally – let's leave it to the European Commission to decide.
Financially, here is what you can consider:
If you are keen to use competing products, Microsoft 365 and Office 365 plans will cost you less.
Switching to Zoom or Slack from Teams will increase your IT budgets:
Zoom has a free plan, but its paid plans start from €14.99 compared to a €2.00 discount for unbundling Teams.
Slack also has a free plan; its paid plans start from approx. €6.70 (their website stubbornly shows us prices only in GBP).
Our expert advice
If you want to keep Teams, renew your existing plans.
If you want to switch, consider the cost benefits. On cheaper plans, it would be prudent to remain subscribed to full bundles until you have fully migrated to competing products.
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