If you’ve been keeping up with Microsoft’s recent announcements (Microsoft announces changes to Microsoft 365 and Office 365 to address European competition concerns – EU Policy Blog), you might be aware that the European Commission had initiated a formal investigation into the bundling of Microsoft Teams with Microsoft 365 and Office 365 suites. This comes soon after the CSP-hoster program was announced, also in response to EU pressure. Shock news, Teams will be unbundled from Microsoft 365 plans.
In rapid response (prior to any recommended actions), Microsoft has announced a set of proactive changes, including unbundling Teams from these suites in the European Economic Area (EEA) and Switzerland, among other adjustments aimed to provide interoperability and choice.
While on the surface these changes might seem like a win-win situation for businesses and regulators, there are multiple layers to consider, especially for Microsoft partners who will be the ones handling the delivery of the changed offers to customers!
NOTE that these changes ONLY apply to the European Union and Switzerland. The rest of the world, I believe stays the same…
What is actually changing
There are three sets of changes
- The Unbundling of Teams from Microsoft bundle SKUs
- Add enhanced supporting resources to help other software companies provide better integrations with Teams/Office
- Improvements to interoperability with Office web apps – in theory allowing other products to leverage these apps in the same way that Teams does.
Changes come into effect quite soon – 1 October 2023
For CSP partners, there will be some operational impact associated with item 1 – the unbundling of Teams, lets focus in on this.
Unbundling of Teams from Microsoft 365 bundles.
Enterprise Suites
Impacts Office 365 E1, E3, E5 and Microsoft 365 E3, E5 bundles
- Existing Subscriptions – can continue to use these SKUs, no material changes.
- New Customers – i.e. those that have not yet purchased Microsoft 365, will not be able to purchase any subscription with Teams bundled. New “EEA (No Teams)” versions of the SKUs will be available in EU/Swiss countries.
- The new bundle Skus will be as follows:
- Office 365 E1 EEA (no Teams) €7.40
- Office 365 E3 EEA (no Teams) €23.10
- Office 365 E5 EEA (no Teams) €39.50
- Microsoft 365 E3 EEA (no Teams) €35.70
- Microsoft 365 E5 EEA (no Teams) €57.70
- Plus the new Teams EEA SKU will be added: €5.00
Frontline Suites
Impacts M365 F1, F3 and Office 365 F3 bundles
The more affordable “F” range of products continue to be offered to both new and existing customers, alongside new EEA versions which exclude Teams. The EEA versions are just €0.50 less than their non-EEA counterparts.
Small and Medium business
Impacts M365 Business Basic, Business Standard and Business Premium
Similar to the Frontline bundles, new EEA (No Teams) SKUs are being added, and the old SKUs will be retained for new and existing customers. In this case, Business Basic EEA is €1 less than the Teams included equivalent, and Business Standard and Premium get a €2 discount if Teams is excluded.
A Cautious Approach to Compliance
Microsoft’s announcement appears to be written in a cooperative and constructive tone. However, given Microsoft’s history of previous antitrust concerns, you might think Microsoft are attempting to pre-empt any judgement that might materially impact their grip on the market. So what are the implications for Microsoft Partners and Businesses?
Cost Savings: A Double-Edged Sword
The unbundling might result in minor cost savings for end-customers that are not actually using Teams. It could be a consideration for some, but will this cost-saving alone be enough to entice businesses to explore alternative solutions outside of Microsoft’s ecosystem?
Flexibility: More Options, More Complexity
The unbundling introduces further complexity in product offerings. While it may provide flexibility, for partners, this means more offerings to deal with, and likely more work involved in ensuring that the right licenses are assigned to users. Processes will be different for customers pre-October and post-October.
Note that for partners using Atria for self-service and helpdesk automation, plans can be configured to ensure this is never a problem for the helpdesk or end-customers.
Interoperability: A Work in Progress
Microsoft promises enhanced interoperability between its products and other solutions, but how this will be implemented remains vague. This could be a significant development, but until more details emerge, partners should prepare for a range of scenarios. It’s unlikely that other collaboration products will immediately be able to drop in and replace Teams.
The European Union’s Take: Unresolved Questions
The EU has long been focused on consumer choice and market fairness. While these changes may look like a move in the right direction, Microsoft will likely remain under stringent scrutiny:
- Will the unbundling genuinely foster competition? Is this all the EU are likely to want?
- Are these changes substantial enough to alter the competitive landscape?
- How do these align with EU data privacy laws?
Conclusion
As partners, we are often the ones left to explain Microsoft’s latest product bundling and pricing to our customers, then implement and drive success. Often challenging, this is another change which will consume time and attention from Microsoft partners. Hopefully it will achieve a longer term positive impact, allowing a little more competition that will help European businesses and also help drive Microsoft to build better products.
