Microsoft introduced the latest versions of Microsoft 365 and Office 365 subscription services, which remove business collaboration chat service called Teams, just weeks after the European Union's regulator opened investigation and competition Slack filed complaints alleging it abused its dominant position to stifle innovation.
The move — which some analysts say is unlikely to change the commercial growth trajectory of Office 365 — follows Microsoft agreeing last year to sell Office 365 suite sans Microsoft Teams offering in the EU and Switzerland. Last year, the software giant agreed to make the changes to try to address some of the 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 Monday. The company introduced Teams as a complementary offering to the Office 365 suite in 2016. It has amassed over 320 million users.
Microsoft said it is also introducing a new standalone Teams offering for enterprise customers outside the EU and Switzerland.
Though the company has long allowed companies to pay separately for Teams, the service had been similarly available bundled into the extremely popular Office 365 suite. That created frustration to some competitors with some arguing that the high-tech giant was taking advantage of the circumstances and unfair to gain an edge over rivals.
Slack, which is owned by Salesforce, has accused some of Microsoft's actions in the past as "illegal", saying the Windows-maker forced installation of Teams to customers through its market-dominant productivity suite and was hiding the true cost of its chat and video service.
Microsoft did not mention such issues in its blog, but it has stated that with the change, it is offering flexibility to existing customers, allowing them to hold onto their existing bundled package, which includes Teams, Office, and more. These customers are allowed to renew their current deal, update it, or choose a new offer that apparently fits better in the book of needs.
Furthermore, the company has announced standalone pricing for Teams at $5.25 for every user per month for new customers, and it will offer Office packages without Teams, at prices that depend on which Office package and what features are included and range between $7.75 and $54.75.
According to a note seen by TechCrunch, Morgan Stanley estimates that this decision made on Monday by Microsoft will likely not alter O365 commercial growth trajectory as more consolidation (and not less) seems the way for CIOs, going forward due to macro pressures and technological progress like GenAI driving stronger gains for broader suites and deeper data sets.
It also offers more flexibility when purchasing Teams with such compelling value, starting at just $5.25 per user, per month for New Microsoft Teams Enterprise Standalone, compared to Slack Pro at $7.25/mo and Slack Business+ at $12.50/mo. The Enterprise Suites without Teams save only by $2.25 while the Standalone prices are $5.25. And in the case of new customers that translates to an effective price increase. According to the analysts, F1 SKU's require only $0.50 per user per month for usage in Teams while using Teams in Business SKU's costs only $1.25-$2.25 per user per month.