Microsoft to decouple Teams from its Office suite on a global level – report

Apr 1, 2024 6:36 pm | News

Microsoft (NASDAQ:) plans to begin offering its chat and video app, Teams, as a standalone product, separating it from its Office suite on a global scale, Reuters reported on Monday.

This decision comes six months after the tech behemoth initiated a similar separation in Europe, responding to regulatory scrutiny over its product bundling practices.

The European Commission has been probing Microsoft’s integration of Office and Teams following a 2020 complaint by Slack, now owned by Salesforce (NYSE:), which argued that Windows maker’s bundling of Teams with Office gave it an unfair market advantage.

Teams, which became part of Office 365 at no extra cost in 2017 and replaced Skype for Business, soared in popularity during the pandemic, especially for its video conferencing capabilities.

To address these concerns, Microsoft started selling Teams and Office as separate entities in the EU and Switzerland in August of the previous year.

“To ensure clarity for our customers, we are extending the steps we took last year to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally,” a Microsoft spokesperson told Reuters.

“Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardise their purchasing across geographies.”

Expanding this strategy globally, the company revealed in a blog post the launch of new Microsoft 365 and Office 365 commercial suites that exclude Teams for regions outside the EEA and Switzerland, alongside a standalone Teams option for Enterprise customers.

From April 1, Microsoft is offering flexibility to customers who can stick with their existing licenses or opt for the newly structured packages, the report says.

For new commercial clients, the cost for Office sans Teams will vary between $7.75 and $54.75, while Teams as a separate product will be priced at $5.25. Prices will differ by country and currency, and specific rates for the previously bundled packages weren’t disclosed.

Despite these changes, Microsoft might still face EU antitrust charges in the near future, as rivals continue to challenge the pricing and interoperability of their services with Office Web Applications, according to the report.

Having previously incurred €2.2 billion in EU fines for similar practices, Microsoft could face severe penalties of up to 10% of its global annual turnover if found in violation again.

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