On April 1st, 2024, Microsoft introduced significant changes to the licensing of Microsoft Teams, affecting new enterprise customers globally. This article will highlight these changes, focusing on how they impact Canadian customers, and provide a detailed look at the options available for both new and existing subscriptions.
Overview of Changes
Previously, Microsoft bundled Teams with Office 365 and Microsoft 365 suites. However, as of April 1st, Teams has been unbundled and requires a standalone purchase for new enterprise customers. This change follows a similar adjustment in Europe in October 2023, which Microsoft implemented to address antitrust concerns.
Impact on Existing Subscriptions
For existing enterprise customers with E1, E3, or E5 licenses, there is minimal immediate impact. These customers can continue using their current subscriptions with Teams included. They also have the flexibility to renew, upgrade, or add seats to their current Microsoft 365 and Office 365 subscriptions. Additionally, if they wish, they can choose to switch to new suites that do not include Teams on their contract anniversary or renewal.
Microsoft 365 Business Subscriptions
For small and medium-sized business (SMB) customers, Microsoft 365 Business Basic, Standard, and Premium plans are still available with Teams bundled. These customers now have the option to choose plans either with or without Teams, with adjusted pricing to reflect these options.
Table of Subscription Changes
Here’s a table showing the Enterprise subscriptions which no longer bundle Teams:
| Subscription Type | Before April 1st | After April 1st |
| Office 365 E1 | Teams Included | Teams Separate |
| Office 365 E3 | Teams Included | Teams Separate |
| Office 365 E5 | Teams Included | Teams Separate |
| Microsoft 365 E3 | Teams Included | Teams Separate |
| Microsoft 365 E5 | Teams Included | Teams Separate |
Note: For existing enterprise customers, there is minimal immediate impact as they can continue using their current subscriptions with Teams included.
New Licensing Options for New Customers
New enterprise customers will need to purchase Teams as a separate add-on to their Microsoft 365 or Office 365 suite. The Teams Enterprise product is now available for $7.10 per user per month on its own, allowing businesses to choose the software packages that best suit their needs.
Summary of the Changes
- Existing enterprise customers with E1, E3, or E5 licenses will see minimal immediate impact. They can continue, renew, upgrade, or add seats to their current Microsoft 365 and Office 365 subscriptions with Teams included.
- New enterprise customers must now purchase Teams separately from their chosen Microsoft 365 or Office 365 suite.
- Existing customers can keep using, renewing, upgrading, and adding licenses to the SKUs they have already subscribed to. If they wish to change to the new suites that don’t include Teams, they can do so on their contract anniversary or renewal.
- SMB customers have the flexibility to choose Microsoft 365 Business Basic, Standard, and Premium plans either with or without Teams. The pricing has been adjusted accordingly.
| Customer Type | Licensing Options | Teams Included | Notes |
| Existing Enterprise | E1, E3, E5 | Yes | Can renew, upgrade, or add seats |
| New Enterprise | Must purchase separately | No | Teams is a standalone purchase |
| SMB | Business Basic, Standard, Premium | Optional | Pricing adjusted for plans without Teams |
Canadian Pricing for Subscription Suites
New and existing small and medium-sized business (SMB) customers, as well as those with frontline workers, can choose between packages with Teams or without at the time of purchase or at subscription renewal. New enterprise customers will need to purchase Teams as a separate add-on to their Microsoft 365 or Office 365 suite.
| Business | Monthly Price* |
| Microsoft 365 Business Basic (no Teams) | $6.40 |
| Microsoft 365 Business Basic (with Teams) | $8.10 |
| Microsoft 365 Business Standard (no Teams) | $13.90 |
| Microsoft 365 Business Standard (with Teams) | $17.00 |
| Microsoft 365 Business Premium (no Teams) | $26.80 |
| Microsoft 365 Business Premium (with Teams) | $29.80 |
| Frontline | Monthly Price* |
| Office 365 F3 (no Teams) | $4.70 |
| Office 365 F3 (with Teams) | $5.40 |
| Microsoft 365 F1 (no Teams) | $2.40 |
| Microsoft 365 F1 (with Teams) | $3.10 |
| Microsoft 365 F3 (no Teams) | $10.20 |
| Microsoft 365 F3 (with Teams) | $10.90 |
| Enterprise | Monthly Price* |
| Office 365 E1 (no Teams) | $10.50 |
| Office 365 E3 (no Teams) | $29.30 |
| Office 365 E5 (no Teams) | $50.40 |
| Microsoft 365 E3 (no Teams) | $47.60 |
| Microsoft 365 E5 (no Teams) | $74.30 |
| Teams | Monthly Price* |
| Microsoft Teams Essentials | $5.40 |
| Microsoft Teams Enterprise | $7.10 |
| Microsoft Teams Premium | $9.50 |
*Monthly pricing reflects CAD for an annual commitment as of the publish date.
Reason for the Change
The unbundling of Teams from the Office 365 and Microsoft 365 suites is a strategic move by Microsoft. It allows for more flexibility and customization of enterprise software packages. Additionally, it addresses regulatory concerns and promotes fair competition in the software market.
FAQ Microsoft Teams Licensing Changes for Canadian Customers on the Changes
Here are some frequently asked questions regarding the new licensing changes:
Q: How does this affect current Microsoft Teams users in Canada? A: Existing customers will see no immediate change and can continue, renew, upgrade, or add seats to their current subscriptions with Teams included.
Q: What should new customers be aware of with these changes? A: New enterprise customers will need to purchase Teams as a separate add-on to their Microsoft 365 or Office 365 suite.
Q: Are there any price changes for Canadian customers? A: Specific pricing details for Canadian customers have been adjusted to reflect the new licensing structure. For detailed pricing, please refer to the table above.
Q: Will there be any impact on the functionality of Microsoft Teams? A: The functionality of Microsoft Teams remains unchanged. The only difference is how the service is licensed for new customers.
The recent changes to Microsoft Teams licensing are part of Microsoft’s ongoing efforts to adapt to market demands and regulatory requirements. Canadian customers, both existing and new, should review these changes to understand how they might affect their subscriptions and usage of Microsoft Teams.
