Microsoft has once again updated the way Teams is licensed within Microsoft 365 (M365) and Office 365 (O365), effective November 1, 2025. This Microsoft Teams licensing change follows evolving regulatory requirements, specifically the recent European antitrust probe, and marks a return to a more traditional packaging model for enterprise customers worldwide. Let’s go back to the future!
Why This Change Happened
European regulators introduced additional antitrust requirements that pushed Microsoft to revisit its unbundling strategy. As a result, Microsoft bundles are back, including Teams, while continuing to offer unbundled versions without Teams at lower price points. This approach balances regulatory compliance with customer flexibility and transparency.
What This Microsoft Teams Licensing Means for Your Organization
Here’s the breakdown of how the new Microsoft bundles structure works:
New Customers (after November 1, 2025)
If you’re purchasing Microsoft 365 or Office 365 licensing for the first time after this date, you now have two options:
- Bundles with Teams included. This option will be available to both the O365 and M365 E1, E3 and E5 licenses.
- Bundles without Teams are offered at a lower price to reflect the absence of Teams.
- This option gives organizations flexibility based on collaboration needs, compliance requirements or preferred tooling.
Existing Customers on Unbundled Plans
If you’re already on an O365 or M365 licensing plan from before that excluded Teams, you cannot switch immediately. You will need to wait until your next renewal cycle to move back to a version that includes Teams. This is critical for budgeting and planning, as many organizations may want to consolidate licensing again.
What If You Don’t Want Teams?
If you are sticking with the “no Teams” plan, you will be paying less through Microsoft. Many organizations use alternative collaboration platforms like Zoom, Slack, Webex or Google Workspace, though the cost analysis per technology will vary. It is also worth considering that consolidating tools can simplify licensing and improve the overall end-user experience.
Pricing Details and Global Scope
- Bundles with Teams will cost about the same as the “no Teams” bundle + Teams Enterprise (which was the solution many European firms went to after the initial law passed in Europe).
- Bundles without Teams have a fixed price reduction compared to those with Teams (e.g., Office 365 E3 without Teams costs about $14.45 per user/month vs. $23.00 per user/month with Teams).
- Standalone Microsoft Teams licenses are priced at least as high as the difference between the bundle with Teams compared to without, which maintains consistent pricing and prevents customers from bypassing the bundle structure.
- These changes apply to all Enterprise customers worldwide.
What Comes Next
Regulatory shifts continue to reshape the landscape, and organizations should expect further licensing adjustments. Alongside monitoring these changes, IT leaders benefit from reviewing existing commitments, assessing integration challenges when mixing Teams or Microsoft bundles with other collaboration platforms, and planning for adoption and change management. A clear governance strategy ensures smoother transitions and reduces operational friction as the environment evolves.
At Withum, we help clients navigate these complexities with clear guidance, cost modeling and strategic planning for Microsoft Teams licensing and beyond. If you need support evaluating your options or preparing for your next renewal cycle, we’re here to help.
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