Microsoft 365 Licensing Update 2024 – Microsoft Teams add-on licences

Earlier this year, you may have read or seen in the news that Microsoft conceded to the European Commission that it would “unbundle” Microsoft Teams from some of its licences. Originally announced in August last year – Microsoft 365, Office 365 and Microsoft Teams would have significant changes to the offerings in the European Economic Area (EEA) and Switzerland.

Starting October 1, 2023, Microsoft introduced a new lineup of commercial Microsoft 365 and Office 365 suites in these regions that do not include Microsoft Teams, and a new standalone Teams offering for Enterprise customers.

What this meant was that no new subscriptions were available within EEA and Switzerland for the following products:

  • Office 365 E1/E3/E5, Microsoft 365 E3/E5
  • Microsoft 365 F1/F3
  • Office 365 F3
  • Microsoft 365 Business Basic/Standard/Premium

Organisations with existing subscriptions could continue to use, renew, upgrade, and add seats to their current plans as usual. Or, if they wished to switch to the new lineup (and purchase the new separate Microsoft Teams licence in addition), they can do so on their contract anniversary or renewal.

Crucially – this did not affect UK customers.

However, that changed on 1st April 2024.

Microsoft made the decision to extend the same approach worldwide, to “ensure clarity and streamline decision making and negotiations”. As in the EEA and Switzerland, customers with existing subscriptions that include Microsoft Teams will be able to continue using plans they have already chosen. Seat numbers can be adjusted, renewed and upgraded – however, no new purchases (new subscriptions) of any licences containing Teams can be made.

There are two notable exceptions which do affect UK customers:

  • Frontline (M365 F1/F3 and Office 365 F3)
  • Business (Business Basic/Standard/Premium) suites.

Customers requiring these will still be able to choose between with or without Teams – though this only applies to countries outside the EEA and Switzerland (so this does apply to the UK).

If you require the Enterprise licences (M365 E3/E5 or Office 365 E1/E3/E5), then it doesn’t matter where in the world you are purchasing because only a version without Microsoft Teams is available for new subscribers. An additional Microsoft Teams Enterprise licence will be required for any user to access Teams.

Inevitably, this will lead to an increase in costs, and potentially also in complexity for organisations who are making changes in their licensing estate. The biggest impact will be to those who outgrow the 300-user limit of the Microsoft 365 Business range – as they will need to choose a new M365 Enterprise licence, and add a Teams licence on top.

If you are looking for any guidance for your Microsoft Cloud licensing – why not talk to us? We also offer a Microsoft 365 Licensing Assessment, which can help you understand your total cost of ownership and highlight potential cost savings.

Claim your FREE Microsoft 365 Licensing Assessment

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Stuart Wilkie
Having worked in technical services for many years in several industries, I am now dedicated to supporting customers once they have solutions in place. Being passionate about Microsoft 365 and Service Management, and with 7 years of experience in this field, I look for innovative ways to support customers. Making it easier to get the most out of the platform and services you have invested in matters to me. Overseeing our Managed Services and Support Team, I see a wide variety of requests – and we are always looking to go the extra mile through our friendly approach.
Published On: May 21st, 2024 Categories: Most Recent

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