Microsoft to unbundle Teams from Microsoft 365, Office 365 in bid to appease European regulators

Mary Jo Foley is the Editor in Chief at Directions on Microsoft. Before joining Directions, Mary Jo has worked as... more

Starting October 1, Microsoft will make available cheaper versions of its Microsoft 365 and Office 365 suites that do not include Teams as part of the bundle to customers in the European Economic Area (EEA) and Switzerland. Microsoft is doing this in the hopes of appeasing the European Commission, which is investigating the effects of Microsoft bundling Teams with Microsoft 365 and Office 365, based on a complaint filed by Slack in 2020.

Microsoft officials said they believe these changes will address two of the European Commission’s concerns: That customers should be able to choose a business suite without Teams for less than if Teams were included; and that Microsoft needs to do more to make interoperability easier between rival communication and collaboration solutions and Microsoft 365 and Office 365 suites.

Microsoft announced its updated pricing for the Teams-free suites on August 31. These Teams-free versions are available for purchase by customers with enrollments in EEA countries and Switzerland; from the EEA/Switzerland pricelists; and/or for deployment on EEA/Switzerland tenants out of datacenters in those geographic areas.

The Teams-free versions of Microsoft 365 and Office 365 will cost two euros less per month (24 euros less per year) for its core enterprise customers. Teams still will be available for new enterprise customers to buy standalone at 5 euros per month/60 euros per year.

Existing enterprise customers who already have a suite with Teams included can opt to stay with the version with Teams included or move to a Teams-free option. New commercial customers of M365/Office 365 business suites who still want Teams will need to purchase two SKUs: A version without Teams bundled along with a separate Teams EEA SKU. New small/mid-size business (SMB) customers in the EEA and Switzerland will have the option to buy the existing M365 Business Basic, Standard and Premium suites with Teams or the new EEA versions without Teams.

An updated price list for the various versions of Office 365, Microsoft 365 and the frontline suites is here. Education and consumer customers are not affected by these new policy/pricing changes, according to Microsoft’s Frequently Asked Questions (FAQ) guide.

Will Office Customers Bite?

“This is sure to be as relevant in time as the Windows N and K editions,” said Directions on Microsoft analyst Wes Miller. “It’s a pure regulatory appeasement move, although you might save a few bucks as a customer if you somehow don’t need Teams for your European employees.”

Windows N and K(N), for those needing a Microsoft history refresher, are the versions of Windows sold to European and South Korean customers which did not include certain bundled programs, including Messenger, Windows Media Player, Video, Voice Recorder and Skype. They were created to appease European antitrust regulators in 2004, and were not popular, to put it mildly.

Microsoft also will enable Windows 11 customers in the EEA to use their default browser to open links in Outlook and Teams chats. Currently, web links in Outlook and Teams chats open by default in Edge regardless of the default browser setting in the client OS. Microsoft is making this change because of requirements in the EU enforced by the Digital Services Act and the Digital Markets Act. Customers outside of these geographies will continue to have their links in Outlook and Teams redirected by Microsoft to open in Edge.