Global realignment of Microsoft 365 licenses

Maxime Hiez
Teams
01 Apr, 2024

Introduction

On August 31, 2023, Microsoft announced significant changes to its Microsoft 365 and Office 365 suites in response to concerns raised by the European Commission regarding competition in the European Economic Area (EEA) and Switzerland. These changes aim to address issues related to the bundling of Microsoft Teams with Microsoft 365 and Office 365, ensuring a fairer competitive environment.

Background

The European Commission launched a formal investigation into Microsoft’s bundling practices, focusing on whether the inclusion of Microsoft Teams in its business suites hindered competition. Microsoft has a long history of integrating communication and collaboration tools into its business offerings, starting with Office Communicator in 2007 and evolving through Lync, Skype for Business, and now Microsoft Teams.

In October 1, 2023, Microsoft unbundled Teams from Microsoft 365 and Office 365 Suites and created a new standalone Teams offering for Enterprise customers.

Key changes announced

Starting April 1, 2024, Microsoft will offer its core enterprise customers the option to purchase Microsoft 365 and Office 365 suites without Teams at a reduced price. This move allows customers to choose a business suite without Teams, addressing one of the primary concerns of the European Commission.
Microsoft Teams will still be available as a standalone product for new enterprise customers, this ensures that customers who need Teams can still access it independently of the business suites.
Microsoft is committed to enhancing interoperability between its products and rival communication and collaboration solutions. This includes making it easier for third-party applications to integrate with Microsoft 365 and Office 365, fostering a more competitive and open ecosystem.

How will these changes affect existing customers ?

Existing customers who already subscribe to Microsoft 365 or Office 365 suites with Teams will have new options. They may continue to use, renew, upgrade, and otherwise adjust their subscriptions as before. They may also now switch to suites without Teams at anniversary/renewal or add new user subscriptions to suites without Teams or to the new Teams standalone at any time (including alongside suites with Teams).

New pricing

Changes to Enterprise Suites

Existing suites with Teams	New Suites without Teams (after Apr. 1)	Pricing
Office 365 E1	Office 365 E1 (no Teams)	7.75$ (USD)
Office 365 E3	Office 365 E3 (no Teams)	20.75$ (USD)
Office 365 E5	Office 365 E5 (no Teams)	35.75$ (USD)
Microsoft 365 E3	Microsoft 365 E3 (no Teams)	33.75$ (USD)
Microsoft 365 E5	Microsoft 365 E5 (no Teams)	54.75$ (USD)

Changes to Frontline Suites

Existing suites with Teams	Pricing	New Suites without Teams (after Apr. 1)	Pricing
Microsoft 365 F1	2.25$ (USD)	Microsoft 365 F1 (no Teams)	1.75$ (USD)
Microsoft 365 F3	8.00$ (USD)	Microsoft 365 F3 (no Teams)	7.50$ (USD)
Office 365 F3	4.00$ (USD)	Office 365 F3 (no Teams)	3.50$ (USD)

Changes to Business Suites

Existing suites with Teams	Pricing	New Suites without Teams (after Apr. 1)	Pricing
Microsoft 365 Business Basic	6.00$ (USD)	Microsoft 365 Business Basic (no Teams)	4.75$ (USD)
Microsoft 365 Business Standard	12.50$ (USD)	Microsoft 365 Business Standard (no Teams)	10.25$ (USD)
Microsoft 365 Business Premium	22.00$ (USD)	Microsoft 365 Business Premium (no Teams)	19.75$ (USD)

Introducing a new Teams standalone license

New Microsoft Teams Standalone (after Apr. 1)	Pricing
Microsoft Teams Enterprise	5.25$ (USD)

Conclusion

Microsoft’s proactive steps to address the European Commission’s concerns demonstrate its commitment to supporting a healthy competitive environment. These changes not only comply with regulatory requirements but also offer customers greater choice and flexibility in selecting the tools that best meet their needs. As the investigation continues, Microsoft remains dedicated to cooperating with the Commission and implementing meaningful changes in the market.