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On April 1, 2024, Microsoft Teams’ licensing underwent significant changes, affecting new enterprise customers globally. Despite the timing, this change wasn’t an April Fool’s prank. It actually marks a rather significant shift as Microsoft Teams is now separated from the Office 365 and Microsoft 365 suites, requiring a standalone purchase. This move follows a previous change in Europe in October 2023, aimed at addressing antitrust concerns, but it was unexpectedly extended globally without prior notice.

Key Microsoft Teams Changes and Options for Businesses

For existing enterprise customers with E1, E3 or E5 licenses, there is minimal immediate impact. These groups can continue, renew, upgrade, or add seats to their current Microsoft 365 and Office 365 subscriptions with Teams. New enterprise customers, however, must now purchase Teams separately from their chosen Microsoft 365 or Office 365 suite.

Existing customers can keep using, renewing, upgrading, and adding licenses to the SKUs they have already subscribed to. 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.

SMB customers have the flexibility to choose Microsoft 365 Business Basic, Standard, and Premium plans either with or without Teams. The pricing has been adjusted accordingly. For example, Business Basic with Teams costs $6.00, and without Teams, it costs $4.75.

New Microsoft Teams Pricing and Structure

The Teams Enterprise product is now available for $5.25 per user per month on its own. This change allows businesses to choose the software packages that suit their needs best, giving them more flexibility and potentially affecting budget considerations. In general, the new pricing will result in a slight decrease in cost for organizations that do not wish to utilize Microsoft Teams, but would be more expensive when Microsoft Teams is purchased separately.

For example, a current customer who has an Office 365 E3 plan that combines different features would pay $23 per month for Office 365 with Teams, under the new licensing a customer would pay $20.75 for Office 365 without Teams, and $5.25 for the Teams license, making the total price $26 per month for the same licensing.

Non-commercial sectors like Academic, Education, and Government are not affected by these changes, keeping their current licensing agreements without extra costs for Teams.

Bundled Microsoft Teams Enterprise Licenses (Grandfathered plans)

Enterprise licensing with teams is still available for purchase to existing E1, E3 & E5 license customers, but not available to new customers.

License TypeIncludes Teams?Price/user/monthAvailable to new Customers?
Microsoft 365 Business Basic (w/ Teams)Yes$6.00Yes
Microsoft 365 Business Standard (w/ Teams)Yes$12.50Yes
Microsoft 365 Business Premium (w/ Teams)Yes$22.00Yes
Office 365 E1 (w/ Teams)Yes$10.00No
Office 365 E3 (w/ Teams)Yes$23.00No
Office 365 E5 (w/ Teams)Yes$38.00No
Microsoft 365 E3 (w/ Teams)Yes$36.00No
Microsoft 365 E5 (w/ Teams)Yes$57.00No

Licensing available to new customers

License TypeIncludes Teams?Price/user/month
Microsoft 365 Business Basic (No teams)No$4.75
Microsoft 365 Business Standard (No teams)No$10.25
Microsoft 365 Business Premium (No teams)No$19.75
Office 365 E1 (No teams)No$7.75
Office 365 E3 (No teams)No$20.75
Office 365 E5 (No teams)No$35.75
Microsoft 365 E3 (No teams)No$33.75
Microsoft 365 E5 (No teams)No$54.75
Microsoft Teams EnterpriseYes$5.25

FAQ Summary

  1. Can existing E3 or E5 customers continue with Teams included? Yes, they can renew, upgrade, or add more seats to their current plans with Teams.
  2. Can new enterprise license customers still buy bundled E3 or E5 licenses with Teams? No, Teams must now be purchased separately by new enterprise customers.
  3. Can new small business license customers still buy bundled Business Standard or Business Premium licenses with Teams? Yes, Business Essentials, Standard and Premium licenses may still be purchased with Teams. However, there is now another option to purchase it without
  4. Can existing customers mix licenses with and without Teams under the same tenant? Existing customers “legacied” into the bundled enterprise licensing may choose licenses with or without Teams as they add licenses. For existing licenses, they will remain under the license they have now until their next renewal, at which time they may opt to continue with those bundled licenses, or switch to new subscriptions without Teams.

Impact and Strategy

This unexpected change emphasizes the need for businesses to stay alert regarding licensing dynamics, which can significantly influence their operational and financial planning. Microsoft’s decision to separate Teams from its main suite offerings globally, extending beyond the European precedent, underscores the evolving nature of software licensing and the importance of regulatory compliance and market flexibility.​

Additional details from Microsoft regarding this change can be found here:

How We Can Help

New Charter Technologies is a proud Microsoft Partner with six (out of six possible) Solutions Partner designations: Modern Work, Security, Business Applications, Infrastructure, Data & AI and Digital & App Innovation, and further specializations in Azure Virtual Desktop, and Azure Networking Services. We maintain Microsoft Premier Support for partners as part of our solution offerings for clients.

Partner with us to modernize your workplace. We can help you leverage technology to improve communications, security, productivity, operations, and more. Modern IT services from New Charter Technologies offers the best of both worlds: local IT solutions supported by a nationwide team with extensive experience and specialized expertise. Reach out today!