Microsoft Makes Changes to Microsoft 365 and Office 365 Licensing in Response to EU Concerns

tl;dr:Microsoft Teams will no longer be part of Office 365 bundles from 1/10/2023 for new clients in EEA and Switzerland.

Microsoft, a leading name in the world of technology, has recently announced significant changes to its licensing structure for Microsoft 365 and Office 365 suites, specifically targeting its business customers in the European Economic Area (EEA) and Switzerland. These changes come in response to concerns raised by the European Commission regarding the bundling of Microsoft Teams with these suites for business customers. The Commission had initiated a formal antitrust investigation into this bundling practice. In this blog post, we will delve into these changes, their implications, and how they may affect businesses and SMEs relying on Microsoft’s services.

Unbundling Microsoft Teams

Starting from October 1, 2023, Microsoft will unbundle Microsoft Teams from its Microsoft 365 and Office 365 suites in the EEA and Switzerland. This move allows enterprise customers in these regions to choose a Microsoft 365 subscription without Teams at a reduced price, saving €2 per month or €24 annually. Furthermore, Microsoft will offer a standalone version of Teams for new enterprise customers at a list price of €5 per month or €60 per year.

For existing enterprise customers who already have a suite with Teams, they will have the option to stick with their current productivity suite or transition to a suite without Teams. This change primarily impacts enterprises and aims to address the European Commission’s concerns about customer choice and pricing flexibility.

What This Means for Businesses

These adjustments in licensing may have implications for businesses, especially SMEs, that rely on Microsoft’s services for their day-to-day operations. Here are some key takeaways:

1. Cost Savings: Businesses in the EEA and Switzerland now have the option to reduce their subscription costs by selecting a Microsoft 365 plan without Teams. This can be particularly appealing for smaller companies looking to optimize their budgets.
2. Flexibility: The unbundling of Teams offers greater flexibility to businesses, enabling them to tailor their Microsoft 365 subscription to their specific needs. Companies can choose to include Teams or not, depending on their communication and collaboration requirements.
3. Interoperability: Microsoft also plans to enhance interoperability with Microsoft 365 and Office 365 apps and services. This means that rival communication and collaboration solutions, such as Zoom and Slack, will have improved integration capabilities with Microsoft’s suite of tools. This could benefit businesses seeking seamless cross-platform communication.
4. Office Web Applications: Microsoft’s decision to allow third-party solutions to host Office web applications provides alternatives for businesses that may prefer to rely on Microsoft’s functionality instead of building their own. This change can simplify processes for integrating Microsoft Office files into various applications.

In the Hands of EU Regulators

While these changes aim to address the concerns of the European Commission and create a more competitive market, Microsoft will await the EU regulators’ final decision on whether these adjustments suffice. The company is committed to ongoing cooperation with the Commission and remains open to exploring solutions that benefit both customers and developers in Europe.

In conclusion, these changes represent a significant shift in Microsoft’s licensing strategy for the EEA and Switzerland. Businesses, particularly SMEs, now have more options and flexibility when it comes to selecting Microsoft 365 and Office 365 plans that align with their needs and budgets. As these adjustments take effect, it will be interesting to see how businesses in these regions adapt and utilize these new opportunities in their day-to-day operations.