Microsoft Teams No Longer 'Free': What It Means for the Channel

Following legislation in the European Union that said Microsoft Teams will no longer be free, unbundling Microsoft Teams from its 365 offer, the software goliath said it would take the same action in North America, forming a separate pricing arrangement for 320 million Microsoft Teams users. 

Now, existing Microsoft customers can keep existing bundled licensing or switch to new unbundled licenses when they are up for renewal. Microsoft says new customers must buy Teams separately at a list price of $5.25.

Under its previous model, Microsoft Teams was "free," or included in the price of a Microsoft 365 license. In 2020, then-Slack CEO Stewart Butterfield said Microsoft including Teams in its 365 bundles wasn't fair — and misleading. 

Microsoft then changed how it reported its users, switching to monthly active users over daily active users. Butterfield argued that there was no way to compete with the tech giant if it gave away its Teams offer when a customer bought a 365 bundle. 

With Microsoft Teams no longer "free," Keith Dennis, chief of staff at Six 8 Trusted Advisors, believes Zoom stands to benefit from the move.

"Zoom CEO Eric Yuan will need to give Salesforce CEO Marc Benioff (which owns Slack) an extra special gift this holiday season," Dennis told Channel Futures. "Zoom stands to profit from this move to unbundle teams in the EU and more importantly in North America." 

Dennis believes that if the Microsoft Teams licensing and usage economics pencil out equally or close to Zoom, it's "a no-brainer" to select Zoom.

"I have been scratching my head for a few years now as to why CIOs and the organizations they support are OK with a 99.9% [service-level agreement] − which Microsoft has repeatedly missed − when they can get a far better user experience and contractually based uptime guarantee from Zoom, and the likes of RingCentral and Dialpad," Dennis shared. 

We have plenty more to dissect with the help of industry experts, so check out the slideshow above to see what they say about the move by Microsoft.