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Important Changes to Microsoft 365 Licensing & Microsoft Teams

Important Changes to Microsoft 365 Licensing & Microsoft Teams

Microsoft has decided to split its Teams business messaging and video app from its Office software globally. In the recent Microsoft announcement, effective April 1, 2024, Microsoft Teams would be separated from the Office 365 and Microsoft 365 suites, requiring a standalone purchase.

The change comes months after Microsoft removed Teams from Office in Europe after the European Commission investigated the bundling of Teams with Office following a complaint from rival Slack in 2020, but the “unbundling” was unexpectedly extended globally without prior notice.

Key Implications for Your Business

  • Existing enterprise customers with E1, E3, or E5 licenses can continue, renew, upgrade, or add seats to their current Microsoft 365 and Office 365 subscriptions with Teams. If a current customer wishes to change to the new suites that don’t include Teams, they can do so on their contract anniversary or renewal.
  • New enterprise customers, however, must now purchase Teams separately from their chosen Microsoft 365 or Office 365 suite at the standalone pricing for Teams at $5.25 per user per month.
  • New and existing SMB customers can choose Microsoft 365 Business Basic, Standard, and Premium plans either with or without Teams, with pricing adjusted accordingly. For example, Business Basic with Teams costs $6.00, and without Teams, it costs $4.75.
  • Non-commercial sectors like Academic, Education, and Government are not affected by these licensing changes, and keep their current licensing agreements without extra costs for Teams.

Microsoft Teams Licensing for New Enterprise Customers

New customers to Office/Microsoft 365 Enterprise suites outside the EEA and Switzerland who wish to provide end users with Teams need to purchase two SKUs: one Microsoft 365 (no Teams) or Office 365 (no Teams) suite and Microsoft Teams Enterprise.

This new pricing structure offers some flexibility. For example, if your business wants to subscribe to Office 365 E3 and also have Teams, the cost per user per month is $26.00. Or alternatively, your business doesn’t need to purchase Teams, in which case the cost per user per month is $20.75.

See Microsoft’s pricing structure for new enterprise licenses:



Options for Microsoft 365 & Frontline Suites


Licensing Changes to Microsoft 365 Business suites:


Licensing Changes to Frontline suites:


Questions & Answers

How will these changes affect existing customers?

Existing customers who already subscribe to Microsoft 365 or Office 365 suites with Teams have new options. They may continue to use, renew, upgrade, and otherwise adjust their subscriptions as before. They may also now switch to suites without Teams at anniversary/renewal or add new user subscriptions to suites without Teams or to the new Teams standalone at any time (including alongside suites with Teams).

Can existing customers mix licenses with and without Teams under the same tenant?

Existing customers can mix the new “no Teams” suites with their current subscriptions that include Teams. This means they can have some users on a plan with Teams and others on a plan without, all under the same tenant.

How will these changes affect new customers?

  • New commercial/enterprise customers who wish to provide information workers with both Microsoft Teams and the value in existing Microsoft 365 E3/E5 or Office 365 E1/E3/E5 suites will need to purchase two SKUs: one E1/E3/E5 (no Teams) suite and Microsoft Teams Enterprise.
  • New small and medium business customers will be able to choose between the existing Microsoft 365 Business Basic/Standard/Premium suites with Teams or the new (no Teams) versions of those suites.
  • For Frontline workers, customers will be able to choose between the existing Microsoft 365 F1, Office 365 F3, and Microsoft 365 F3 suites with Teams included or the new (no Teams) versions of those suites.

Key Takeaways & Next Steps

While the recent announcement and changes in the software licenses were unexpected, the key takeaways are: 

  • New enterprise customers will have to purchase two SKUs if they want to provide end users with Teams.
  • Existing customers have the flexibility to continue with their current licensing structure or change to a different subscription without Teams, ultimately lowering costs.
  • Businesses of all kinds must be vigilant and remain aware of abrupt licensing changes such as this as it can significantly influence their operational and financial planning.

Let Sourcepass help ease the burden of unexpected, dynamic software license changes. Our experienced team of highly trained experts can help guide you to make the right decisions for your business to best suit your needs, provide more flexibility, and potentially save money.


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