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After the European Commission started investigating Microsoft’s bundling of Teams with its Microsoft 365 and Office 365 commercial subscriptions last month, Microsoft is ready to address the concerns of EU regulators. This morning, the company announced that will start unbundling Teams from its Microsoft 365/Office 365 commercial suites in the EU and Switzerland on October 1, 2023.
The European Union opened a formal investigation of Microsoft’s bundling practice after Slack, one of the main competitors to Microsoft Teams filed an anti-competite complaint with the European Commission back in 2020. At the time, David Schellhase, General Counsel at Slack accused Microsoft of using the same tactics it previously used to block competition in the web browser space at the beginning of the century. “They created a weak, copycat product and tied it to their dominant Office product, force installing it and blocking its removal, a carbon copy of their illegal behavior during the ‘browser wars’,” the Slack exec said.
Today, Microsoft did try to justify why it makes sense to include Teams with Microsoft 365 and Office 365 suites for business customers. “We believe that business customers in Europe and around the world expect a modern work solution to include modern communication and collaboration capabilities. That’s why, for more than a decade, we have included these capabilities in our business suites, starting with Office Communicator in 2007 and evolving and innovating over the years through Lync, Skype for Business Online, and most recently Microsoft Teams,” said Nanna-Louise Linde, Vice President, Microsoft European Government Affairs.
However, the exec did acknowledge that it has the responsibility to “support a healthy competitive environment,” and that discussions with the European Commission helped the company to reach a reasonable solution. “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,” Linde said.
In practice, Microsoft will be launching commercial Microsoft 365 and Office 365 suites in Europe and Switzerland that do not include Teams, allowing customers to save €2 per month or €24 per year. A standalone Teams subscription will also be available for enterprise customers at €5/month or €60/year.
The core enterprise customers who already pay for a Microsoft 365 or Office 365 subscription that includes Teams will be available to keep doing so or switch to the new cheaper plans that don’t include Teams. Here are the pricing details courtesy of Microsoft:
If Microsoft is discontinuing its existing suites with Teams for new big enterprise customers, the company will continue to offer Microsoft 365/Office 365 with Teams for SMBs and frontline workers, in addition to new offerings without Teams. Here are the changes to Frontline suites:
Lastly, here are the pricing changes for Microsoft 365 Business suites:
“For our small business and frontline workers, we will keep offering suites with Teams but will at the same time offer a “without-Teams” option, and this latter version will be offered at a lower price,” Microsoft also said.
Multinational organizations with a presence in Europe will also be able to purchase these new no-Teams plans if they already have enrollments inside the EEA/Switzerland. However, they will only be able to use seats in Europe/Switzerland tenants out of data centers in that region.
In addition to Microsoft unbundling Teams from its Microsoft 365/Office 365 commercial plans in Europe, the company announced other changes to improve the interoperability of Microsoft 365 with third-party solutions. To that end, the software giant will create new documentation for developers interested in integrating their apps with Microsoft Teams.
Additionally, Microsoft said today that will create a new method for hosting Office web apps within third-party apps, which will make it unnecessary for developers to create their own. This will allow apps like Slack to more easily replicate the Teams experience where the Office documents open in the Office web apps within Teams.
Even though all these changes should really help to address European competition concerns, the investigation of the European Commission isn’t over yet. “We will continue to engage with the Commission, listen to concerns in the marketplace, and remain open to exploring pragmatic solutions that benefit both customers and developers in Europe,” the VP of Microsoft European Government Affairs said today.
Laurent was the Editorial Manager of the Petri IT Knowledgebase from 2022-2023. He’s also the Senior News Editor of Thurrott.com.
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