Important Update: Changes to Microsoft Teams Licensing
We are committed to keeping you informed about the latest developments and updates that may impact your business. Please review the details of an important Microsoft change to Microsoft Teams licensing and the options for new Microsoft 365 subscriptions effective from April 2024.
With Teams or No Teams – What’s happened to Microsoft 365?
As of April 1, 2024, Microsoft has made significant changes to the licensing of Microsoft 365 (M365) and Office 365 (O365) subscriptions. The primary reasons behind these changes is to realign global licensing, provide clarity for customers and, respond to market dynamics. However, the change will provide customers with more flexibility in choosing the services that best fit their needs. Here are the key points:
Separation of Microsoft Teams from M365 and O365 Licensing
Microsoft Teams will now be separated from the M365 and O365 licensing packages. Outside of the European Economic Area (EEA) and Switzerland, Microsoft has introduced a new lineup of commercial Microsoft 365 and Office 365 suites that do not include Teams.
These new suites are named the same as the existing ones but with the addition of “(no Teams)” in the naming, for example, Office 365 E1 (no Teams), Office 365 E3 (no Teams), and Microsoft 365 E3 (no Teams).
In explaining its ongoing efforts to respond to customer needs and market dynamics, Microsoft notes that this change will provide customers more flexibility in choosing the services that best fit their needs.
However, the options and availability of With-Teams and No-Teams licensing packages vary across the Enterprise and Business licensing landscapes. Here are your options going forward.
Microsoft 365 E3/E5 and Office 365 E1/E3/E5
For Enterprise-level offerings, Microsoft Teams will only be available for new customers as a separate purchase in the form of Microsoft Teams Enterprise, which will add onto the M365 or O365 licensing package.
This means that new subscribers who wish to provide their end users with Teams, will need to purchase two SKUs: one Microsoft 365 (no Teams) or Office 365 (no Teams) suite and Microsoft Teams Enterprise.
Existing subscribers, however, can continue using their current plans and can continue using, renewing, upgrading, and adding seats to their current plans. Alternatively, if they prefer, they can switch to the new lineup on their contract anniversary or renewal date.
Microsoft 365 Business Basic, Standard and Premium
There are more options for the Microsoft 365 Business suites, as both with-Teams and no-Teams versions are available to new and existing customers.
The original Microsoft 365 Business suites with Teams will continue to coexist alongside the new “no-Teams” lineup. New customers will be able to choose between the existing Microsoft 365 Business suites with Teams or the new version of the suite without Teams, or potentially even a mix of the two.
Again, existing customers who wish to continue using their current Microsoft 365 Business suite with Teams can do so, including renewals, license adds, and step-ups. If they wish to switch to the new lineup, they can do so on their contract anniversary or renewal.
Similarly, both with-Teams and no-Teams versions of the Microsoft 365 Frontline F1 and F3 licenses will continue to coexist for both new and existing subscribers.
Is there a price difference? What else is there to consider?
In order to ensure ongoing pricing parity between previous and coexisting offers, the no-Teams packages are priced at a slightly lower per-license per-month rate to account for the potential addition of the Microsoft Teams Enterprise add-on.
However, purchasing or moving to any no-Teams version of Microsoft 365 must be taken under careful consideration and advisement, as the absence or loss of Microsoft Teams functionality across your Microsoft 365 estate will impact on the availability and usability of other connected Microsoft 365 experiences. For example, if you are starting your Generative AI journey with Copilot for Microsoft 365, a no-Teams license will significantly hamper the potential efficiency and productivity gains you might be seeking.
These new packages may offer flexibility of choice but must be considered alongside your current data and document access, communications preferences, engagement and user experience. If you are considering new subscriptions or renewals, it’s crucial to plan accordingly and make careful decisions, not just based on convenience or cost, but also factoring in your integration, security and productivity objectives and requirements.
Need Advice?
We recommend reviewing your current licensing agreements and considering the implications of these changes on your organisation. Feel free to reach out to the Maxsum Sales Team if you would like to review or optimise your license estate.
For a detailed overview of the changes, please refer to the official Microsoft announcement.
