The separation of Teams and Microsoft 365 in Enterprise license plans: What will this cost your company?

Since October 1, 2024, the separation between Microsoft Teams and Microsoft 365 in Enterprise licenses has become a reality. Previously, Teams was a standard part of the Microsoft 365 packages, but now companies have to pay separately for Teams. This brings significant financial and practical implications for organizations that depend on the Enterprise license plans offered by Microsoft. This blog discusses what the separation means for your company and what it might cost.

Background of the separation

Since October 1, 2024, Microsoft has decided to separate Teams from the Microsoft 365 subscriptions. The main reason for this decision is to give customers more freedom of choice when selecting communication tools and collaboration solutions. The separation allows companies to choose from multiple communication platforms on the market, such as Slack or Zoom. This enables companies to select a communication and collaboration platform that aligns with their IT needs.
Additionally, the separation of Microsoft Teams and Microsoft 365 is linked to a complaint from Slack to the European Commission. In 2020, Slack filed a complaint alleging that Microsoft abused its dominant market position by bundling Teams with Microsoft 365. According to Slack, Microsoft created an unfair advantage in the market for collaboration tools.
In response to this complaint, the European Commission launched an investigation into potential anti-competitive practices. The bundling of Teams with other Microsoft products was a central issue in this investigation. The separation of Teams and Microsoft 365 is seen as an action by Microsoft to avoid a potential antitrust fine from the European Commission.

Changes in license structure

The separation of Teams and Microsoft 365 leads to changes in the license structure for some companies. Previously, companies automatically had access to Teams with their Microsoft 365 subscription, but now they have to purchase it separately. This means companies have to pay extra for features that were previously included.

Cost impact for companies

The financial implications of this separation can be significant. However, this depends on the type of license a company uses. For smaller organizations, this might mean a relatively limited increase in costs, but for larger companies with many Teams users, costs can rise considerably. Information about these costs will help you understand the impact of the price changes in Enterprise licenses on your company.

The table below provides an overview of the recent price changes for Microsoft 365 Enterprise subscriptions. Compare old and new prices, including the differences and potential costs for adding Teams.

The prices are based on the new prices from Microsoft's website. The above prices are listed in dollars as Microsoft is an American company. The current exchange rate between dollars and euros at the time of writing is as follows: $1 = €0.91

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Practical implications for users

The separation of Teams not only has financial implications but also practical consequences for new users of Microsoft 365 Enterprise licenses. Companies that rely heavily on Teams for internal communication and collaboration will now have to take extra steps to ensure everyone has access to Teams.

Existing users are not immediately affected. Existing Microsoft 365 subscriptions are simply renewed unless the user chooses to cancel the subscription. This means users can continue their current access to Microsoft 365, including Teams, without additional costs.

Alternatives and how your company can save costs

Companies that want to purchase Microsoft 365 Enterprise licenses, including Teams, for communication and collaboration will have to pay extra. If these companies do not want or cannot invest in additional costs due to the separation of Teams and Microsoft 365, they should look at other solutions. There are various alternatives and options available for these companies.

Alternatives and possible options to save costs for your company:

• Review current Microsoft 365 subscriptions and determine if the new license structure fits your needs and budgets.
• Evaluate and consider alternative communication tools for companies, such as Zoom, Slack, or Google Meet.
• Consider switching to on-premise licenses, such as Office 2021, to maintain more control and cost predictability.

On-premise licenses such as Office 2021, 2019, and 2016 give companies the certainty that they will retain ownership of their software. This means that there is no separation of services as with cloud-based subscriptions. Everything you purchase remains your property without additional costs for add-on licenses like Teams. Companies can continue working with trusted software packages without worrying about unexpected price increases or service separations.

On-premise licenses are not dependent on the cloud, making such licenses often better integrated into business environments where security and control are essential. For organizations that want to maintain full control over their IT infrastructure, Office 2021 can be a good IT solution.

Future developments

The separation of Teams and Microsoft 365 could be a precursor to more future changes in the licensing structures of Microsoft products. Companies will increasingly need to reconsider which IT solutions best fit their needs. For organizations that want more stability in their IT costs, on-premise solutions like Office 2021 remain a valuable alternative.

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