Microsoft’s recent decision to unbundle Teams from its Microsoft 365 and Office 365 suites marks a significant shift in how organizations approach collaboration and licensing. While the change stems from an EU antitrust investigation, its impact is global. For IT leaders and business users, this update reshapes how they think about Microsoft 365 licensing, Teams adoption, and integration with platforms like Dynamics 365.
Why Is Microsoft Unbundling Teams from Microsoft 365 Licensing?
The European Commission raised concerns that bundling Microsoft Teams with Microsoft 365 gave Microsoft an unfair advantage over competitors. In response, Microsoft is now offering enterprise customers the option to purchase Microsoft 365 and Office 365 without Teams, introducing more flexibility and transparency into its licensing model.
Yes, This Impacts U.S. Customers Too
Although the change was prompted by European regulators, Microsoft has confirmed that the new licensing options will be available globally, including in the United States. Starting November 1, 2025, U.S. enterprise customers will be able to choose Microsoft 365 and Office 365 plans with or without Teams.
Microsoft 365 E3/E5 and Office 365 E3/E5 will be offered in two versions: one that includes Microsoft Teams licensing, one that doesn’t.
Plans without Teams will cost less per user/month, allowing organizations to better align licensing with their collaboration strategy.
This will impact commercial and enterprise customers in the U.S. and globally. Government, Education, and Nonprofit plans remain unchanged for now.
What This Means for IT Stakeholders
This shift introduces both complexity and opportunity:
- Strategic Licensing Decisions: Choosing the right Microsoft 365 licensing model now requires a deeper understanding of collaboration needs and budget priorities.
- Tool Evaluation: Organizations may reassess their use of Teams versus alternatives like Slack or Zoom.
- Governance & Compliance: Managing multiple collaboration platforms demands robust policies around data security and user access.
- Integration Planning: Ensuring seamless collaboration between Teams and Dynamics 365 becomes even more critical.
Why Keeping Microsoft Teams as Part of Microsoft 365 Licensing Makes Strategic Sense
While Microsoft now offers the option to license Microsoft 365 without Teams, most organizations in the Microsoft ecosystem will benefit from keeping Teams as part of their collaboration stack. Teams is deeply integrated with Microsoft 365 and Dynamics 365, powering real-time communication, embedded chat, file sharing, and workflow automation across departments. Removing it could disrupt established processes, increase support overhead, and require retraining users on alternative platforms.
For organizations already invested in Microsoft, maintaining Teams ensures continuity, productivity, and a seamless experience across tools.
How We Help
As a Microsoft Partner, we support organizations through every step of this transition:
- Microsoft 365 Licensing Advisory: We help you choose the right plan based on your collaboration strategy and budget.
- Teams Migration & Integration: Whether you’re adopting Teams or integrating it with Dynamics 365, we ensure a smooth rollout.
- Managed Services: Our team provides ongoing support to optimize performance, security, and compliance.
- User Enablement: We deliver training and resources to help your teams stay productive and connected.
Next Steps
While spurred by a regulatory response, this Microsoft Teams licensing change is more than that. It’s a strategic opportunity to rethink how your organization collaborates. Whether you’re staying with Teams, exploring alternatives, or planning a hybrid approach, we’re here to help you make informed decisions and execute them seamlessly.
Let’s talk. Schedule a consultation today to review your Microsoft 365 licensing strategy and ensure your team is set up for success.
Dave Galy
Dave Galy is the founder and CEO of Sparta Services
