Understanding the recent Microsoft Teams licensing changes

In the last half of 2023, Microsoft announced that they were making some changes to their licensing structure across the European Economic Area (EEA) and Switzerland. This was to proactively support and co-operate with a formal investigation by the European commission into anti-competition regulations.  

At the beginning of April, Microsoft also announced that they were rolling out new licensing globally to bring the rest of the world more in line with their new European licensing structure. This worldwide change signifies a shift in how businesses will be able to access various parts of the Microsoft suite, but what exactly are the changes and what impacts can the industry expect to see because of them? 

Microsoft Teams licensing changes 

Going forward, Microsoft has stated that “Office 365 E1/E3/E5 and Microsoft 365 E3/E5 suites with teams [will] no longer [be] sold to new subscribers.” And that licenses with Teams included will be available “only to customers with existing licenses that include Microsoft Teams as of April 1, 2024 outside the EEA and Switzerland”.  

Whereas the obvious impact of this change is that new subscribers will have to purchase two separate SKUs to access Teams and the rest of the Microsoft toolkit, this change may have some other, less obvious impacts. 

  • Businesses could see this as added flexibility that allows them to choose if they want Teams or not on top of their other Microsoft software. 
  • Companies may also find that they are faced with an added complexity where Teams is a must-have for their day-to-day business.  
  • Organizations may face increased costs as they now have to factor in the additional subscription that they need for their collaboration. 

How the Microsoft licensing changes could affect a business 

Let’s take a look at an example of how these changes could affect certain companies and they ways in which they collaborate and communicate. 

Licensing impacts on small businesses  

Company A is a small business who have previously not been able to budget for Microsoft licenses just to be able to use Teams but with these changes they are now able to buy Teams as a standalone license. Because of this they can now not only collaborate internally through this new license but also enable calling through Teams - all they need is a Microsoft Teams license, a Teams Phone license and either a calling plan, or a Direct Routing solution like Call2Teams or Operator Connect. 

Licensing impacts on SMBs 

Company B is a medium sized enterprise who is looking to make the move to unify all of their communication and collaboration tools, but of course their staff members have different needs across the company. They need to have a suite of productivity tools for some, an efficient and scalable collaboration tool for everyone and PSTN calling capability for their Customer Service and Sales departments.  

Because Teams licenses are now unbundled, they are able to get everybody in the company collaborating internally, but they also have the freedom to choose who they want to receive E3 or E5 licenses.  

Whereas they now have this added flexibility, Company B may also find that their overall costs have increased relatively and that there are also added complexities when it comes to handling the more complicated sets of various licenses.  

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