It’s true: Teams is not part of Microsoft 365 anymore. What’s your next step?
We break down these massive Microsoft licensing changes and review your options.

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When you heard that Microsoft made a big announcement on April 1, you may have been tempted to double-check your calendar – but it was no April Fool’s joke. Microsoft Teams is no longer packaged with Microsoft 365. Let’s dive into what has changed and discuss how it may (or may not) affect your organization.

What changed?

Microsoft has separated Teams into its own standalone licensed product, Teams Enterprise, ending its previous inclusion with the Office 365/Microsoft 365 suite of productivity tools.

If you want Teams and Microsoft 365, you will need to purchase both. This also opens up the opportunity to purchase one sans the other.

Why did it change?

Microsoft is proactively taking steps to change licensing in response to the European Commission’s anti-trust investigation regarding the bundling of Teams into the Office 365 and Microsoft 365 SKUs.

How does this affect me?

Well, it depends. Currently, this change only affects commercial customers.

Microsoft divides it into several categories:

New customers

If you do not currently have access to Teams via a legacy SKU* and you choose to purchase Office 365 or Microsoft 365, your licensing will not give you access to Teams. Teams will be available as an optional add-on for an additional charge.

It is worth noting that adding Teams in this manner will be more expensive than the legacy SKUs that include Teams.

Enterprise Agreement customers

If your current legacy SKU* does include Teams, there is no immediate impact on your environment.

Under the terms of an Enterprise Agreement (EA), you can continue to add to or upgrade the SKUs you selected when you signed. This means that come renewal time, you will have the option to renew or upgrade your current SKUs, even if they include Teams.

Conversely, you can choose to downgrade to the “no Teams” SKU for a reduced price. However, if you choose to remove Teams across your environment at renewal, you forfeit future access to the Teams-included SKU. If you decide you want Teams again later, it will result in a net higher price.

Cloud Solution Provider (CSP)/New Commerce Experience (NCE) customers

If you currently have a CSP/NCE agreement that includes Teams, you can continue to add, upgrade, and renew those existing subscriptions.

But if you want to tack on a net new Enterprise suite to your CSP/NCE agreement, you will have to purchase Office 365 or Microsoft 365 without Teams. Teams will be available as an optional add-on for an additional charge.

If you’re an existing CSP Enterprise suite customer with access to Teams and you want to change partners, you’ll continue to have the ability to purchase suites with Teams through CSP through June 30, 2024. Starting July 1, 2024, Microsoft will introduce a transition tool to move subscriptions from one partner to another.

If you’re an existing CSP customer and you want to move to an EA, you will have access to Enterprise SKUs with Teams since you remain an existing customer. However, Microsoft will consider you a new customer for all other change of channel scenarios.

SMB customers

If you have 300 seats or less, or if you’re purchasing Frontline Worker (F1 and F3 suites), you are not affected by this change. You can opt to purchase Microsoft 365 Business Standard, Business Premium, or Business Basic with Teams included, or you can purchase separate SKUs.

Everyone else

If you are licensed as an education, government, nonprofit, or consumer customer, you are not impacted by this change. And if you have an MPSA, Select Plus, or Open Value agreement, you are also not impacted by this change.

*Legacy SKUs includes Office 365 E1, Office 365 E3, Office 365 E5, Microsoft 365 E3, and Microsoft 365 E5.

Taking stock of your options

We’ve provided a lot of information, and you may already be considering your next steps. Here are a few more scenarios:

Is it cheaper to switch to the “No Teams” SKU?

Yes and no. If you don’t need Teams, switching will save you money. However, the combination of a “No Teams” Microsoft 365 or Office 365 SKU plus a Teams Enterprise SKU will be more expensive than the Teams-included SKU. Taking an accurate assessment of your environment will be critical at renewal time.

Can I mix and match licenses – Office with Teams, Office with no Teams, and Teams?

According to Microsoft, yes, you can mix and match licenses – but we do need to advise you of a caveat. Some app functionality, even within Office, requires Teams. Our best advice is to consult with your SHI account executive. They’ll discuss your current environment and needs with you and guide you based on your situation.

SHI has your Microsoft answers!

Microsoft products span everything from modern work to cloud and infrastructure to security. We know it can be time-consuming to keep up with Microsoft product updates and licensing changes – that’s why SHI is proud to be your trusted Microsoft Partner.

We keep our fingers on the Microsoft pulse for you so you can focus on what matters most for your organization. As always, we’ll continue to let you know what you need to know.

Still have questions about your next Microsoft move? Reach out to your SHI Microsoft experts to set up a license advisory session so we can help you make the best choices for your organization.

Speak with a Microsoft specialist