Microsoft Licensing Changes: Microsoft 365 and Teams in 2024

Microsoft has recently announced significant changes to the licensing of Microsoft 365 and Teams, set to take effect from April 1st, 2024. Here’s a breakdown of the key points:

New Lineup: Microsoft is rolling out a new lineup of commercial Microsoft 365 and Office 365 suites for regions outside the European Economic Area (EEA) and Switzerland, which will not include Teams.

Standalone Teams Offering: To cater to Enterprise customers in these regions, Microsoft will introduce a standalone Teams offering.

Existing Subscriptions: Customers who currently have subscriptions that include Microsoft Teams can continue using the plans they’ve already chosen.

Changes for New Subscribers: New subscribers to Office/Microsoft 365 Enterprise suites who wish to provide Teams to their end users will need to purchase two SKUs: one Microsoft 365 (no Teams) or Office 365 (no Teams) suite, and Microsoft Teams Enterprise.

Pricing: Customers should anticipate a moderate to significant increase in costs, ranging from 5% to 44%, when purchasing subscriptions separately. These changes aim to establish globally consistent licensing, providing clarity for customers and simplifying decision-making and negotiations. It’s worth noting that these adjustments primarily impact customers on Enterprise suites, as Frontline and Business suites will still be available for purchase with Teams included.

For CSP customers, existing ‘With Teams’ licenses remain unaffected. This means customers can continue to use, renew, increase quantities, and upgrade existing subscriptions for suites with Teams. Additionally, they can add net new licenses to any suite with Teams previously available and switch to different suites with Teams at anniversary/renewal, as per the terms of their contract.

In summary, while these changes represent a shift in Microsoft’s licensing strategy, existing CSP customers with ‘With Teams’ licenses will experience minimal disruption, ensuring continuity and stability in their subscription plans.