Microsoft Stops Partner Sales Of Some Bundled Teams SKUs

‘All new Microsoft 365 and Office 365 Enterprise customers in regions outside the EEA [European Economic Area] and Switzerland will need to choose from new offers for that region,’ according to a Microsoft blog post.

Microsoft has rolled out Teams licensing changes globally, preventing partners from selling net-new subscriptions of enterprise suites that include Teams. The licensing changes, which previously had applied only to the European Economic Area (EEA) and Switzerland, were enacted to quell European Commission anti-competition concerns.

Along with the end of Office 365 E1, O365 E3, O365 E5, Microsoft 365 E3 and M365 E5 suites with Teams, the Redmond, Wash.-based tech giant introduced a stand-alone Teams offering called Microsoft Teams Enterprise. Microsoft will continue to offer its SMB and Frontline suites focused on small and midsize businesses and workers who interact with customers and service delivery that include Teams.

“All new Microsoft 365 and Office 365 Enterprise customers in regions outside the EEA and Switzerland will need to choose from new offers for that region,” according to a Microsoft blog post. “Existing customers in these regions who wish to continue using suites to which they have already subscribed can do so (including renewal, upsell, and license adds).”

[RELATED: Zoom CEO Calls On Feds To Investigate Competitor Microsoft’s Teams Bundling]

CRN has reached out to Microsoft for comment.

Michael Goldstein, CEO of LAN Infotech, a Fort Lauderdale, Fla.-based Microsoft solution provider and member of CRN’s 2024 MSP 500, told CRN that staying on top of changes with the tech giant’s offerings is part of the job and is a value-add for customers.

“We all have to keep up with licensing changes and properly give our customers updated messaging,” Goldstein said.

In a blog post, the Redmond, Wash.-based vendor said it made the changes for countries outside the EEA and Switzerland because “globally consistent licensing reduces customer confusion and streamlines decision-making.” The licensing changes went into effect April 1.

On customers’ contract anniversary or renewal, they can continue to use their existing plan even if it is an enterprise suite bundled with Teams, according to Microsoft. They can renew, upgrade and add sets to their plans or switch to a new licensing type that does not include Teams.

For solution providers that win a net-new subscriber to Office or Microsoft 365 Enterprise and the customer wants Teams and M365 or O365, the customer will now have to buy two SKUs.

As for a price breakdown for the new SKUs:

Microsoft Teams Enterprise (the new stand-alone Teams SKU) sells for $5.25 per user, per month. The new prices for customers buying Teams Enterprise with one of the M365 or O365 packages are:

The new Teams Enterprise stand-alone offering has a 1,000-seat limit on meeting attendees but no limit on features including chat and calling. Microsoft’s Teams Essentials offering—which is aimed at customers with up to 300 users—is unchanged, according to the vendor.

Sales of these SKUs packaged with Teams for net-new subscribers are no longer possible in all sales channels, including volume licensing, Cloud Solution Provider and Web Direct, according to Microsoft.

None of the changes apply to consumer, academic, government or nonprofit packages, according to Microsoft.

And although Microsoft will keep offering its Frontline and M365 Business suites with Teams included, customers now have an option for new, less expensive SKUs that don’t include Teams.

The price differences in Frontline suites include:

The price differences for the M365 Business suites include:

For all of the prices, Microsoft said the amounts are subject to change and may vary by country and currency.

Response To EU Antitrust Concerns

Microsoft already unbundled Teams for customers in the EEA and Switzerland as part of an effort to quell a formal European Commission investigation into whether the vendor breached competition rules.

Executives with competitors including Zoom and Slack have also spoken out against Microsoft’s Teams-bundled packages. The SKUs affected by the changes for EEA and Switzerland customers were removed from the CSP price list Feb. 1.

A Thursday blog post from German content collaboration platform provider Nextcloud, which has criticized Microsoft commercial practices, said that unbundling Teams from M365 and O365 isn’t enough.

“There are no indications that Microsoft will stop bundling Teams in Microsoft Windows, nor separate its on-premises version of Office from its cloud offering, or separate OneDrive from its office bundle or desktop operating system,” according to the post. “In short, it’s a very, very minimal move in the right direction by the industry giant, only aiming to placate the regulators and likely delay any enforcement activities in lieu of ‘negotiations.’ Nextcloud calls upon the regulators to look through this charade and not be deterred in their efforts to rein in the anti-competitive behavior of Microsoft.”

The blog post points out that Teams unbundling happened about three years after a complaint by Slack. It has been more than three years since Nextcloud filed an antitrust complaint about Microsoft’s bundling of OneDrive, according to Nextcloud.

Teams has been big business for Microsoft. During the vendor’s latest quarterly earnings report in January, Microsoft Chairman and CEO Satya Nadella said that the company saw record Teams use, with more than two-thirds of enterprise Teams customers buying Teams Phone, Teams Rooms or Teams Premium. Teams has more than 320 million monthly active users.

The European Commission has made recent moves in other alleged areas of anti-competitive tactics by tech giants, including a fine on Intel and opening investigations into Google, Apple and Meta.

In the U.S., Google and Amazon Web Services have publicly taken issue with Microsoft cloud practices while the federal government has vowed to take a closer look at Microsoft, Amazon and Google’s investments with artificial intelligence upstarts as moves that could stifle competition.