Global tech giant, Microsoft has announced that it will sell its chat and video app, Microsoft Teams separately from its Office product in markets across the globe. This is coming six months after it unbundled the two products in markets across Europe as part of steps to avert a possible EU antitrust fine.
Microsoft announced in a blog post that it will introduce a new line-up of commercial Microsoft 365 and Office 365 suites that do not include Teams in regions outside the European Economic Area and Switzerland. The tech company also introduced a standalone Teams offering for Enterprise customers in those regions.
Beginning from yesterday, 1 April, customers can either continue their current licensing deal, renew, update or switch to the new offers. Consequently, the price of the Office Suite without the Teams app will cost between US$7.75 to $54.75 depending on the product while Teams Standalone will cost $5.25.
Teams, which was added to Office 365 in 2017 for free, subsequently replaced Skype for Business and became popular during the pandemic due, in part, to its video conferencing. However, competing businesses have protested to the EU anti-trust commission that packaging the products together gives Microsoft an unfair advantage.
Read also: Teams will no longer be available on Microsoft Office for users in Europe
The European Commission has been investigating Microsoft’s tying of Office and Teams since 2020 following a complaint filed by Salesforce about competing workspace messaging app, Slack. In response, Microsoft announced last year that it would sell the two products separately in the EU and Switzerland from October.
“To ensure clarity for our customers, we are extending the steps we took last year to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally,” a Microsoft spokesperson told Reuters yesterday. “Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardise their purchasing across geographies”, it added.
This is not the first time Microsoft has made significant changes to its offerings over an antitrust lawsuit. Recall that in 1998 the US Justice Department sued Microsoft for using the dominance of its Windows platform to stifle competition from rival web browsers. Consequently, the company made concessions that loosened its control on what software computer manufacturers could install on their products.
The possible impact of unbundling Teams on Microsoft’s sales
Some analysts believe that rival internet browsers may experience a surge in popularity following Microsoft’s separation of Teams from Office but the action may not have as dramatic an effect as feared.
After Microsoft Teams was unbundled from Microsoft 365 and Office Suites in Europe in October 2023, the platform has seen the size of its user base remain mostly unchanged, according to Sensor Tower data.
According to the market intelligence firm’s estimates, Microsoft Teams’ mobile app’s monthly active users in the first quarter of 2024 remained relatively flat compared to the fourth quarter of 2023. Both remained at 19 million.
Similar: Microsoft to discontinue WordPad after 28 years of service
Some industry observers have however opined that Microsoft’s unbundling may not be enough to stave off EU antitrust charges which will likely be sent to the company in the coming months. Rivals are still critical of Microsoft’s new pricing and its impact on competition pricing. They are also sceptical of Microsoft’s willingness to allow their messaging apps to function with Office applications.
Microsoft has racked up a total of 2.2 billion euros ($2.4 billion) in EU antitrust fines in the past decade for tying or bundling two or more products together. Continuous fines such as this puts the company at risk of losing as much as 10% of its global annual turnover over antitrust breaches.
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