Microsoft is separating Teams from Office 365 globally after agreeing to split this in EMEA to after EU competition regulators started to investigate Microsoft’s market share growth (since teams was bundled with Office 365), following a complaint from one of their rivals – Slack in 2020.
Microsoft said that the unified move to make the change global will “ensure clarity for customers“.
This will impact all new customers and give existing customers the option to split Teams or keep it in their subscription should they wish!
When does this change take effect?
This change came into affect (1st April) and affects how new customers buy Microsoft 365/Office 365 and Teams moving forwards for net new customers. In short, this means that net new M365 or O365 subscriptions will no longer include Teams and this application will need to be added on separately. The new skus are being created as we speak and will be available shortly.
Note: I have been told that while this was announced from 1st April, the hard stop will be actually be 30th June which is end of Microsoft FY24 Fiscal.
Why are Microsoft making this change?
Microsoft have issued a full brief on this which you can access here, but in short, they have said the following:
"Last year Microsoft updated the way Microsoft 365, Office 365, and Teams were licensed in the European Economic Area (EEA) and Switzerland in response to concerns raised with the European Commission. Now we're announcing our plan to extend that approach worldwide as globally consistent licensing reduces customer confusion and streamlines decision making.
...Microsoft is introducing a new lineup of commercial Microsoft 365 and Office 365 suites that don't include Teams in regions outside the EEA and Switzerland, and a new standalone Teams offering for Enterprise customers in those regions.
We're also ending the sale of net-new subscriptions to existing Microsoft 365 E3/E5 and Office 365 E1/E3/E5 Enterprise SKUs with Teams across all channels: volume licensing (VL), Cloud Solution Provider (CSP), and Web Direct. All new Microsoft 365 and Office 365 Enterprise customers in regions outside the EEA and Switzerland will need to choose from new offers for that region. Existing customers in these regions who wish to continue using suites to which they have already subscribed can do so (including renewal, upsell, and license adds.
What about existing customers?
Microsoft have said they are stopping the new sale of subscriptions to existing Microsoft 365 E3/E5 and Office 365 E1/E3/E5 Enterprise SKUs with Teams across all channels: volume licensing (VL), Cloud Solution Provider (CSP), and Web Direct.
This means that all new Microsoft 365 and Office 365 Enterprise customers in regions outside the EEA and Switzerland will need to choose from new offers for that region.
Existing customers in these regions who wish to continue using suites to which they have already subscribed can do so (including renewal, upsell, and license adds).
How will prices be affected?
Microsoft will be publishing updated SKUs and pricing in the coming few days which you’ll be able to get from you Microsoft licensing partner.
There will also be a net price increase in pricing as a result for new customers (I see this as a stealth tax) due to the separation, but for existing customers (renewing) there is no price change.
Pricing example..
- Microsoft 365 E3 (with Teams): £33.10 RRP
- Microsoft 365 E3 + Teams Enterprise: £31.10 + 4.30 = £35.30
So here you can see an increase of £2.20pupm, which is circa £26k (RRP) for a 1,000 seat organisation.