The Unbundling (and Return) of Teams from Microsoft and Office 365 Packages: What Changes and How to Reduce Costs

Stand-Alone Teams Licenses: From Additional Cost Item to New Price Point

In this in-depth analysis, we examine why, following the unbundling of Teams, companies risked higher recurring costs without gaining real operational benefits, and we share some practical tips to optimize spending under the new post–November 2025 configuration.

The Unbundling Phase (October 2023–November 2025)

Starting October 1, 2023, Microsoft began the process of separating Teams from Microsoft 365 and Office 365 packages for customers in the European market (EEA and Switzerland). This move was a direct response to the European Commission’s investigation into alleged abuse of dominant position.

In this first phase: 

• Enterprise plans (e.g., Microsoft 365 E3/E5, Office 365 E1/E3/E5) no longer included Teams by default. A “no Teams” version was introduced at a reduced price (about −€2/month or −€24/year).

• Teams became a separate license (stand-alone SKU), available for about €5/user/month.

• Existing customers could keep their current plan with Teams included or switch to the “no Teams” variant at a reduced price.  

• For Business plans (small businesses and frontline workers), the suite with Teams remained available, alongside a “no Teams” version at a slightly lower price (about €1–2 per month).

As of April 1, 2024, this new structure was extended globally: for all new Enterprise subscriptions worldwide, Teams was no longer included in the suites and had to be purchased separately. Plans including Teams remained available only for existing customers until contract renewal or modification.

Microsoft turned a regulatory constraint into a business opportunity: on one hand, the move increased revenue (and thus customer costs); on the other, it positioned Teams as a standalone product potentially cheaper than alternatives like Zoom or Slack — the very competitor that initiated the complaint to the Commission.

An Extra Line in the Budget

In practice, Teams became a new cost item in IT budgets. According to Forrester, this change amounted to a disguised price increase for many organizations, especially those that previously received Teams as part of the bundle at no extra cost.

The Forrester table cited in the related article clearly illustrates the effect of separating Microsoft Teams from Microsoft 365 and Office 365 packages: with identical functionality, companies now had to purchase two separate licenses — the “no Teams” suite and the stand-alone Teams license — with an average increase of about $3 per user per month.

In absolute terms, the increase was similar across plans, but the percentage impact varied significantly. For lower-tier packages like Office 365 E1, the price rose from $10 to $13 per month — a 30% increase, a heavy blow for cost-conscious organizations. For Office 365 E3, the increase was 13%, while for Office 365 E5 it dropped to 7.9%.

The same logic applied to Microsoft 365: M365 E3 rose from $36 to $39 (+8.3%), while M365 E5 went from $57 to $60 (+5.3%) — a smaller percentage increase, but still significant in absolute value when multiplied by hundreds or thousands of licenses.

The message was clear: the additional cost of Teams weighed more heavily on lower-tier plans but in all cases resulted in a recurring increase that, on large volumes, could generate substantial sums. For example, a company with 500 users on Office 365 E1 would end up spending around $18,000 more per year just to maintain the same service perimeter.

Rising Costs: What Could Be Done  

With the unbundling of Teams, companies that failed to analyze their actual needs risked paying for unnecessary licenses and facing higher recurring costs without a corresponding operational benefit. To limit financial impact while maintaining full compliance, several good practices proved useful:

• Assess actual needs: Evaluate whether all employees with Microsoft 365 subscriptions truly require a chat, video conferencing, and file-sharing app. In some cases, collaboration features already available in other corporate tools may be adequate.

• Eliminate unused licenses: Implement continuous monitoring — through advanced Software Asset Management (SAM) tools — to identify Teams licenses no longer in use (e.g., due to employee departures or role changes).

• Plan hybrid scenarios: Determine whether it’s truly necessary to extend Teams to the entire organization or whether it’s more efficient to reserve it for specific departments, combining it with other existing tools to reduce overall expenditure.

2025 Update: Teams Returns to Bundles (but with Price Differences) 

Surprisingly, Microsoft announced that as of November 1, 2025, Teams would once again be included in Microsoft 365 and Office 365 suites. The “separation” therefore lasted two years, but its reintroduction is not a return to the past:

Each suite will be available in two variants — with Teams and without Teams. To comply with the European Commission agreement, Microsoft will apply a global price delta between the two options:

• M365 E3/E5, O365 E3/E5 → +€8 (€8.55)

• M365 Business Standard/Premium → +€3 (€3.21)

• M365 F3 → +€1 (€1.07)

This approach offers customers greater choice and transparency, though minor price increases may occur for those who currently have Teams included by default. Updated price lists are not yet official, but several analysts foresee possible upward adjustments. 

Conclusion: More Choice, but Watch for Hidden Costs 

Microsoft’s trajectory shows that behind every change lies a business strategy — not merely regulatory compliance. 

For companies, this means monitoring contracts and usage is critical:

• Yesterday, during unbundling, to avoid double payments; 

• Tomorrow, with reintegration, to properly account for price deltas and legacy contract effects.

At WEGG, we help clients do exactly this: analyze scenarios, optimize Microsoft 365/Office 365 licensing (see an example of our approach here), and identify cost-saving opportunities — even in an ever-evolving environment.