Microsoft Excludes Teams from Business Collaboration Chat Offering Following EU Scrutiny and Complaints from Rival Slack
Microsoft has introduced new versions of its Microsoft 365 and Office 365 subscription services, excluding its business collaboration chat offering Teams. This move follows scrutiny from the European Union regulator and complaints from rival Slack.
Background on Microsoft’s Changes to Office 365 Suite
Last year, Microsoft agreed to sell the Office 365 suite sans Microsoft Teams offering in the EU and Switzerland. At the time, the software giant said it was making the changes to address concerns raised by the European Commission.
"Globally consistent licensing helps ensure clarity for customers and streamline decision making and negotiations," the company wrote in a blog post on Monday.
Introduction of Standalone Teams Offering
Microsoft is also introducing a new standalone Teams offering for enterprise customers outside the EU and Switzerland. Although Microsoft has long allowed businesses to pay separately for Teams, it has also offered the service bundled with the widely popular Office 365 suite. This move has upset some competitors who claim that Microsoft was leveraging its position in an unjust manner to gain a competitive edge.
Concerns from Slack
Slack, owned by Salesforce, has termed Microsoft’s actions "illegal" in the past, alleging that the Windows-maker forced installation of Teams on customers through its market-dominant productivity suite and hid the true cost of the chat and video service. Microsoft didn’t address these concerns in its blog post but said it is offering flexibility to existing customers, allowing them to maintain their current bundled package that includes Teams, Office, and other products.
New Pricing Options for Customers
For new customers, Microsoft has introduced standalone pricing for Teams at $5.25 per user per month. Additionally, Office packages without Teams will be available at prices ranging from $7.75 to $54.75, depending on the specific package and features included.
Variants of Microsoft 365 Business Excluding Teams
Microsoft is also introducing a new variant of Microsoft 365 Business that excludes Teams. This move has been estimated by Morgan Stanley analysts to "unlikely change the O365 commercial growth trajectory" as more consolidation seems to be the direction of travel for CIOs due to macro pressures and technological progress like GenAI driving stronger gains for the broader suites and deeper data sets.
Analysis from Morgan Stanley Analysts
Further, providing more choice for purchasing Teams clearly illustrates its compelling value, at just $5.25 per user per month for New Microsoft Teams Enterprise (standalone), which compares to Slack Pro at $7.25/mo and Slack Business+ at $12.50/mo.
Pricing Comparison
The price reduction in the Enterprise Suites without Teams is only $2.25, yet the standalone cost is $5.25. For new customers, this equates to a pricing increase. Using Teams in F1 SKU’s costs only $0.50 per user per month and using Teams in Business SKU’s cost only $1.25-$2.25 per user per month.
Impact of Microsoft’s Changes
The story was updated with details from Microsoft’s official blog and Morgan Stanley’s comment.
Topics
- Apps
- Microsoft
- Microsoft 365
- Microsoft Teams
- Office 365
- Salesforce
- Slack
About the Author
Manish Singh is a senior reporter at TechCrunch, covering India’s startup scene and venture capital investments. He also reports on global tech firms’ India play. Before joining TechCrunch in 2019, Singh wrote for about a dozen publications, including CNBC and VentureBeat. He graduated in Computer Science and Engineering from the Indian Institute of Technology, Delhi.
