Bowing to pressure, Microsoft unbundles Teams from Microsoft 365 worldwide

Months after unbundling the apps in the European Union, Microsoft is taking the Office and Teams breakup worldwide. Reuters reports that Microsoft will begin selling Teams and the other Microsoft 365 apps to new commercial customers as separate products with separate price tags beginning today.

This is a win for other team communication apps like Slack and videoconferencing apps like Zoom, both of which predate Teams but haven’t had the benefits of the Office apps’ huge established user base.

The separation follows an EU regulatory investigation that started in July of 2023, almost exactly three years after Slack initially filed a complaint alleging that Microsoft was “abusing its market dominance to extinguish competition in breach of European Union competition law.”

In August of 2023, Microsoft announced that it would be unbundling the apps in the EU and Switzerland in October. Bloomberg reported in September that Zoom had met with EU and US Federal Trade Commission regulators about Microsoft, further ratcheting up regulatory pressure on Microsoft.

In October, Microsoft European Government Affairs VP Nanna-Louise Linde described the unbundling and other moves as “proactive changes that we hope will start to address these concerns in a meaningful way,” though the EU investigation is ongoing, and the company may yet be fined. Linde also wrote that Microsoft would allow third-party apps like Zoom and Slack to integrate more deeply with the Office apps and that it would “enable third-party solutions to host Office web applications.”

Reuters says that current Microsoft 365 customers who want to keep using the Office apps and Teams together can continue to subscribe to both at their current prices. New customers will have the option of subscribing to either or both: a Teams subscription will start at $5.25 per user per month, while the Office apps will start at $7.75 per user per month and go up to $54.75 per user per month depending on the subscription tier.

Whether this represents a price increase or decrease depends on the specific Microsoft 365 product you’re comparing it to; the Microsoft 365 Apps for Business subscription offers just the Office desktop apps and 1TB of OneDrive storage for $8.25 per user per month, 50 cents more than the new price for Office without Teams. But the price for subscribing to Teams and Office together goes up to $13 per user per month, 50 cents more than the current Microsoft 365 Business Standard subscription.

Microsoft offers such a wide range of products and pricing across all of its business, enterprise, government, and nonprofit tiers that it’s difficult to make direct comparisons without more information. We’ve contacted Microsoft for clarification and will update if we get a response.