Microsoft unbundles ‘Teams’ from Office suite

It seems Microsoft has finally given up to intense regulatory and competition pressure. The Redmond-based tech giant has now decided to unbundle its collaborative communication platform Teams, from its flagship productivity suite, Office 365. This global rollout comes after a trial separation implemented in the European Union (EU) and Switzerland in late 2023. The change will be effective from today, April 1.

This development is hardly an unexpected one, given that it has been in the works for years. It can be traced back to a 2020 complaint filed by Slack, the well-known and well-received competing communication platform owned by Salesforce. At that time, Slack alleged that Microsoft’s practice of bundling Teams with Office 365 constituted an anti-competitive tactic. The European Commission, the EU’s executive branch responsible for enforcing competition law, launched an investigation shortly thereafter.

The investigation centered on whether Microsoft’s dominant position in the productivity software market, with Office 365 holding a significant market share, unfairly disadvantaged competitors like Slack by essentially forcing users to adopt Teams as their primary communication tool. Microsoft’s initial response came in October 2023, when it began offering standalone versions of Office 365 (without Teams) in the EU and Switzerland.

Now, Microsoft plans to implement this separation on a global scale. The introduction of a new lineup of commercial Microsoft 365 and Office 365 suites, excluding Teams, offers existing customers the option to maintain their current licensing deal, or transition to the new offerings, as well as offers a flexibility that is particularly beneficial for customers who prefer alternative communication platforms like Zoom or Google Meet while still leveraging the Office suite for productivity purposes. Additionally, new commercial customers can now opt for Office without Teams at varying price points, ranging from $7.75 to $54.75, depending on the product, with Teams available as a standalone offering for $5.25.

You likely will not see any immediate changes to your current subscription and will be able to keep your bundled plan that includes Teams if that’s what you have now. In the future, however, you will have the option to renew, update, or switch to the new offerings depending on your needs. With Teams offered as a standalone option, you’ll have a broader range of communication platforms to consider. This could be beneficial if your company or organization already uses another platform like Zoom or Google Meet and doesn’t necessarily require Teams.

Still, this may not be enough to appease the regulators. The EU investigation is still ongoing, and Microsoft may still face significant financial repercussions if found guilty of violating antitrust laws. Potential penalties could reach up to 10% of the company’s global annual turnover.