Teams or No Teams: The New Microsoft 365 Licensing Question

To align its subscriptions worldwide, Microsoft announced it is set to revise its licensing structure for Microsoft 365 and Office 365, including changes to how Microsoft Teams licensing is bundled into these services. Initially implemented in the European Economic Area (EEA) and Switzerland, these changes are now being extended globally.

What’s Changing with Microsoft Licensing and Teams?

As of April 1, 2024, Microsoft has significantly adjusted the offering of Teams with Microsoft 365 (M365) and Office 365 (O365) subscriptions. Microsoft Teams will now be separated from the standard M365 and O365 licensing packages. For Enterprise-level offerings, Microsoft Teams will only be available as a separate purchase for new customers. This change was the company’s response to the regulatory ruling in European courts, which aimed to enhance competition and reduce package bundling that limited customer choice.

Changes to Microsoft Teams Licensing and What They Mean

Here’s what these changes entail:

1. New Licensing Structure:
   • Microsoft will offer new versions of M365 and O365 that do not include Microsoft Teams. These offerings will be identified by a “(No Teams)” label appended to the suite names. This change aims to allow businesses to tailor their software packages more precisely, choosing only the necessary components.
2. Standalone Microsoft Teams SKU:
   • Alongside the updated suites, Microsoft is rolling out a standalone Microsoft Teams option for enterprise customers. This move allows businesses to incorporate Teams into their operations as a separate purchase.
3. Phasing Out Current Teams-Inclusive Enterprise SKUs:
   • Microsoft will discontinue the sale of new subscriptions to existing enterprise SKUs that include Teams, such as Microsoft 365 E3/E5 and Office 365 E1/E3/E5. New customers will need to navigate the new suite options that exclude Teams.

Source: Microsoft 

What This Means for Microsoft Customers Who Use Enterprise Subscriptions

The upcoming licensing changes by Microsoft will have specific implications for enterprise customers, affecting both existing and new customers differently. Here’s how these changes impact users:

• Existing Customers: If you currently use an M365 or O365 plan that includes Teams, you can continue with your existing subscription, including any renewals and upgrades. This provision ensures that licensing changes do not interrupt your organization’s day-to-day operations. Additionally, this continuity allows your team to maintain access to all current features and future updates without reassessing your software licensing needs.
• New Customers: From April 2024 onward, new customers must abide by the updated licensing structure. This change will require selecting from the new suites that do not include Microsoft Teams as a default component. Depending on business requirements, new customers must add Teams as a separate purchase to ensure their organization can access Microsoft’s comprehensive communication and collaboration tools.

Understanding “No Teams” Implications for SMB Customers

For small and medium business (SMB) customers, the upcoming changes to Microsoft 365 licensing present new choices that align with different business necessities regarding Microsoft Teams.

 Options Available to SMB Users

Unlike their Enterprise counterparts, SMBs will have the flexibility to select from the existing M365 suites that include Teams or opt for new versions of these suites that do not include Teams. This change allows SMBs to tailor their software solutions more closely to their specific operational requirements.

1. Existing SMB Suites with Teams:
   • Microsoft 365 Business Basic/Standard/Premium: These current offerings include Microsoft Teams, among other features. They are designed to meet the diverse needs of SMBs, from basic office applications and cloud storage to advanced security and device management.
2. New SMB Suites Without Teams:
   • In response to the broader licensing changes, Microsoft will also offer new versions of the Business Basic, Business Standard, and Business Premium suites without Microsoft Teams. These “No Teams” versions will cater to businesses that may prefer alternative communication tools or do not require the integrated collaboration features that Teams provides.

As Microsoft introduces these changes, staying informed and prepared will enable SMBs to make decisions that align with their goals and ensure continuity in their business practices.

Frontline Worker Subscriptions

Frontline Worker subscriptions Microsoft 365 F1 and Microsoft 365 F3 with teams will continue to be offered side by side with “No Teams” versions to give customers the flexibility to choose.

Moving Forward with a Trusted Partner

Microsoft’s changes to the licensing of M365 and O365, particularly the separation of Teams from many of its suite offerings, mark a significant shift in how businesses will access and deploy these tools.

As these adjustments unfold, organizations must understand how they will impact current and future software usage and deployments. The evolving landscape will influence decisions and strategies, regardless of whether one is an existing Microsoft/Office 365 user or considering new subscriptions.

As an experienced Microsoft Solutions Partner, OneNeck is ideally placed to guide and support your company through these changes. Our experts are ready to help you understand what these licensing updates mean for your business and to find the best options to meet organizational needs.

If you have any questions or need advice on navigating the new Microsoft licensing environment, Contact OneNeck today to set up a consultation.

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