Microsoft unbundles Teams and Office 365 in Europe amidst pressure from Slack

 Microsoft Office 365 bundle under scrutiny from the European Commission
Microsoft Office 365 bundle under scrutiny from the European Commission

What you need to know

  • Microsoft will unbundle Teams from Microsoft 365 in the Economic Area and Switzerland.

  • The decision comes amidst an ongoing antitrust investigation into Microsoft's bundling practices by the European Commission.

  • Organizations will be able to purchase Microsoft 365 subscriptions without Teams for a lower price than the current offering or purchase a standalone subscription for Teams.

  • Companies will continue to be able to purchase subscriptions of Teams and Office for the same price as the current bundled option.

Microsoft Teams and Microsoft Office will soon be unbundled in several countries across Europe. Microsoft announced the decision today that will affect organizations in the European Economic Area and Switzerland. Starting on October 1, 2023, organizations in affected regions will be able to purchase Microsoft 365 subscriptions without Teams.

The main difference going forward is that organizations can now choose to have Office without Teams at a lower price than the currently available bundle. Microsoft 365 subscriptions without Teams will be available for €24 per year, which is €2 less per month.

The price of Office with Teams remains the same. Existing customers will be given the option to continue with the current plan or switch to a plan without Teams.

The fact that Office on its own is cheaper is the key. Companies that wish to use a different communication software, such as Slack, can now take the cost per user that would have gone toward Teams and spend it wherever they'd like. Those same organizations could also, of course, not use any communication software at all.

There will also be an option to purchase standalone Teams subscriptions, giving organizations a more affordable way to access the communication software if they do not need the rest of the Microsoft 365 suite.

"Today we are announcing proactive changes that we hope will start to address these concerns in a meaningful way, even while the European Commission’s investigation continues and we cooperate with it. These changes will impact our Microsoft 365 and Office 365 suites for business customers in the European Economic Area and Switzerland," said Microsoft Vice President of European Government Affairs Nanna-Louise Linde.

Microsoft highlighted its plans over the coming months in relation to the unbundling:

  • First, beginning October 1, 2023, we will unbundle Teams from our Microsoft 365 and Office 365 suites in the EEA and Switzerland.

  • Second, we will enhance our existing resources on interoperability with Microsoft 365 and Office 365.

  • Finally, we will create new mechanisms to enable third-party solutions to host Office web applications.

In addition to unbundling Teams from Office, Microsoft will work to improve interoperability between Office and competing apps. Specifically, third-party solutions will be able to host Office web apps.

The decision to unbundle Teams and Office and make other changes is in response to the ongoing investigation by the European Commission. That investigation is, at least in part, in response to complaints by Slack.

While unbundling Teams from Office may be enough to appease the European Commission, Microsoft explained that it understands more steps may need to be taken.

"We do this not with the sense that this will necessarily resolve all concerns, whether from the Commission or our competitors, but we believe this is a constructive step that can start to lead to immediate and meaningful changes in the market," said Linde.