Starting Oct. 1, 2023, Microsoft will introduce new suites in the European Economic Area (EEA) and Switzerland. The new offerings include both a new set of Microsoft 365 and Office 365 suites that no longer contain Teams as well as a new free-standing Teams offering. The new licensing approach is not only a response to the recently expressed concerns from the European Commission regarding competition rules, but also a measure to reduce disruption for customers and partners in these regions. What does that exactly mean for you and your organization?

Microsoft recently unveiled some upcoming crucial changes to the way it licenses Microsoft 365, Office 365, and Microsoft Teams, within the European Economic Area (EEA) and Switzerland.

Quoting Microsoft, they are implementing these changes in an effort to remain focused on the needs of their customers while also taking meaningful steps to address concerns that have been raised with the European Commission.

Starting October 1, 2023, Microsoft will implement the following changes:

1. New commercial Microsoft 365 and Office 365 suites without Teams will be introduced for the EEA and Switzerland
   
   
2. Microsoft 365/Office 365 Enterprise bundles with Teams included will no longer be offered in EEA and Switzerland.
   
   
3. A new Teams offering for Enterprise customers will be launched as a standalone SKU.

Changes to Enterprise Suites

New subscribers of Enterprise Suites

Teams will no longer be a part of Office 365 E1, Office 365 E3, Office 365 E5, Microsoft 365 E3, and Microsoft 365 E5 suites for new subscribers. However, the new "Microsoft Teams EEA" SKU ensures that new subscribers have the option to add Teams functionality if they so desire.

Existing subscribers of Enterprise Suites

No impact on running Office 365 E1, Office 365 E3, Office 365 E5, Microsoft 365 E3, and Microsoft 365 E5 subscriptions. The existing subscription will still include Teams functionality. A renewal of running subscriptions will continue to include Teams functionality. Customers can increase the license count of the existing subscription and the additional seats will also include Teams functionality.

If existing subscribers would prefer to transition to a new EEA Office 365/Microsoft 365 SKU without Teams, they can do so upon the renewal day of said subscription.

Figure1: Changes toEnterprise suites. Source: https://www.microsoft.com/en-us/licensing/news/Microsoft365-Teams-EEA

Changes to Business and Frontline Suites

Both the Microsoft Business and Frontline suites will coexist with the new lineup of Microsoft Business and Frontline suites without Teams.

For Microsoft Business, customers in the EEA and Switzerland will be able to choose between the existing Microsoft 365 Business Basic, Microsoft 365 Business Standard, and Microsoft 365 Business Premium suites with Teams or the new EEA-specific versions of those suites without Teams.

Figure 2: Microsoft Business suite changes. Source: https://www.microsoft.com/en-us/licensing/news/Microsoft365-Teams-EEA

For Frontline, customers in the EEA and Switzerland will be able to choose between the existing Microsoft 365 F1, Office 365 F3, and Microsoft 365 F3 suites with Teams or the new EEA-specific versions of those suites without Teams.

Figure 3: Frontline suite changes. Source: https://www.microsoft.com/en-us/licensing/news/Microsoft365-Teams-EEA

Our thoughts about Microsoft unbundling Teams out of Office

Existing customers with either Enterprise, Business, or Frontline subscriptions can continue to use all functionality provided and will not be impacted, which is a good thing. Upon renewal, customers can decide to either let the existing subscription renew automatically, keeping the included Teams functionality or choose to transition to a new EEA subscription without Teams.

However, a few things to consider:

• All Office and Microsoft 365 EEA suites without Teams are a bit cheaper, so if you do not currently use Teams and are not planning to start using Teams in the near future, you can introduce a cost-saving by choosing any of the offered suites without Teams.
  
  
  • Teams is very integrated in all services offered in the Office or Microsoft 365 suites and usage statistics indicate most of our CSP customers are currently using Teams for collaboration and/or communication. It remains to be seen just how popular the “No Teams” offerings will become, but we believe the added value of Teams, ease-of-use, and provided functionality in collaboration and communication vastly outweighs the minor cost saving of choosing the suites without Teams.
    
    

• Adding Teams functionality back into new Office 365/Microsoft 365 EEA (No Teams) Enterprise suites will require purchasing two SKUs. The total cost of both SKUs is higher than the soon-to-disappear Office 365/Microsoft 365 with Teams Enterprise suite.
  
  
  • For customers planning to upgrade their existing Enterprise E1/Enterprise E3 subscriptions towards a higher Enterprise SKU, with active Teams usage or a future need for Teams functionality, the cost-effective action would be to upgrade before October 1st to have Teams included in the Office 365/Microsoft 365 SKU. Starting October 1st, any upgrade with a need for additional Teams functionality would require two SKUs: the Office 365/Microsoft 365 EEA (no Teams) suite + Microsoft Teams EEA, resulting in a higher combined list price.
    
    
    • • The same thing applies to Business or Frontline customers on the verge of upgrading towards any Enterprise SKU.
        
   
• Certain features like Teams Phone, Viva Insights, Audio Conferencing, … depend on Teams. Customers will need to ensure they have Teams either as part of a suite or as a standalone to use these features.

At the time of writing, it is unclear what will happen with the included call control and PBX capabilities currently offered in Office 365 E5 and Microsoft E5 SKUs. Both features are heavily dependent on Microsoft Teams and with the omission of Teams going forward, we are not sure yet what this will mean for these capabilities in the new Enterprise E5 suite offerings without Teams*

*We will update this blog post when more information is available.

At Arxus, we can help you choose the best license option going forward that fits your organization’s current and future needs. We strive to align your roadmap and goals with the best-fitting license option and can also provide assistance in accelerating your roadmap progression and achieving your Modern Work goals.

If you have any questions concerning the upcoming changes or wish assistance or guidance, feel free to contact us at sales@arxus.eu. Existing customers can contact us using the regular support channels or reach out to their account manager.

Sources used and referenced:

-https://www.microsoft.com/en-us/licensing/news/Microsoft365-Teams-EEA
-https://blogs.microsoft.com/eupolicy/2023/08/31/european-competition-teams-office-microsoft-365/