Important Microsoft 365 Licensing Changes for Teams

In a move to standardise offerings and simplify customer choices, Microsoft is making significant modifications to the licensing of Microsoft Teams, which come into effect on April 1, 2024. These changes will impact both new and existing customers outside the European Economic Area (EEA) and Switzerland. Here’s a detailed breakdown of what to expect and how it may affect your business:

Key Changes to Microsoft Licensing 

New Product Suites: Microsoft is launching new commercial suite versions of Microsoft 365 and Office 365 that will not include Teams. These will be available in addition to a new standalone Teams offering specifically tailored for enterprise customers. 

End of Sale for Existing SKUs: Effective April 1, 2024, Microsoft will discontinue new subscriptions to existing Microsoft 365 E3/E5 and Office 365 E1/E3/E5 Enterprise SKUs that include Teams through all channels—volume licensing, Cloud Solution Provider (CSP), and Web Direct. 

Implications for New and Existing Customers: Those subscribing to Office/Microsoft 365 Enterprise suites in impacted regions will need to purchase Microsoft Teams separately if they wish to use the service. Those already subscribed can continue their services as usual. This includes renewals, license additions, and stepping up to higher plans. Customers desiring the new non-Teams suites can switch at their contract renewal. 

The change affects several products, including: 

  • Microsoft 365 E3/E5 
  • Office 365 E1/E3/E5 
  • Microsoft 365 Business Premium, Standard, Basic 
  • Microsoft 365 F1/F3, Office 365 F3 

Introducing Standalone Teams SKU: Alongside suite changes, Microsoft is introducing a standalone 'Microsoft Teams Enterprise' SKU specifically for enterprise clients, catering to the growing need for flexible software solutions. 

Existing SMB and Frontline Options: Microsoft will continue to offer existing SMB and Frontline suites with Teams included. This allows customers to choose between the new "no Teams" versions and the traditional offerings. 

Implications for Taking Over a Tenancy: For businesses taking over an existing Microsoft tenancy, the changes mean you must buy out the current subscription from the previous IT support to procure new licensing. Business products will still offer a SKU that includes Teams, while Enterprise licenses will require a separate Teams license.

The Impact on Existing Customers  

  • Enterprise Clients will no longer be able to buy new Enterprise suites that include Teams. They will need to purchase two separate SKUs if they require Teams functionality. 
  • SMB and Frontline Customers can still opt for suites with Teams included, offering greater flexibility depending on their needs. 

What are my next steps? 

This update marks a strategic shift by Microsoft to streamline its offerings and address global market needs more effectively. In the long run, all new subscribers will need to adapt to the new licensing models introduced by Microsoft therefore businesses should prepare for these changes by reviewing their current licenses and planning accordingly to ensure continuity and compliance with new licensing standards. 

For further assistance or inquiries about transitioning to new licenses or implementing the standalone Teams SKU, please get in touch 01582 935055 / 


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