Microsoft Teams Unbundling Brings Flexible Licensing for Microsoft 365

In September 2025, Microsoft announced a major change: Teams will no longer be automatically bundled with Microsoft 365 and Office 365 suites for new commercial customers worldwide. 

This shift stems from a European Commission antitrust investigation following a 2020 complaint from Slack, which argued that bundling Teams with Microsoft 365 limited competition and customer choice. After years of scrutiny, Microsoft responded by introducing a more flexible licensing model that takes effect on November 1, 2025. 

Microsoft Responds to EU Pressure with a Flexible Licensing Model 

For organizations, this means you can now choose Microsoft 365 or Office 365 with or without Teams, or purchase Teams as a standalone product. This change is designed to give businesses more control over collaboration tools and reduce unnecessary costs for those using alternatives like Zoom, Slack, or Webex. 

Pricing Updates for Transparency and Flexibility 

Microsoft is introducing a fixed price difference between suites with Teams and those without. This change applies across multiple plans, including Microsoft 365 and Office 365 E3/E5, Office 365 E1, Microsoft 365 F3, and the Business Basic, Standard, and Premium tiers. 

Here’s the breakdown of pricing changes effective November 1, 2025: 

• Microsoft 365 and Office 365 E3/E5 (without Teams): Reduced by $6.30 per user/month 
• Office 365 E1 (without Teams): Reduced by $0.96 per user/month 
• Microsoft 365 F3 (without Teams): Reduced by $0.67 per user/month 
• Microsoft 365 Business Basic (without Teams): Reduced by $0.36 per user/month 
• Business Standard and Business Premium (without Teams): Reduced by $0.96 per user/month 
• Standalone Teams Enterprise: Increased by $3.30 per user/month 

Existing customers will keep their current pricing until renewal, at which point they can choose from the new options. This approach creates a clearer pricing structure and allows organizations to pay only for what they need. 

What This Means for your Organization 

The biggest takeaway is flexibility. If your organization relies on another collaboration platform, you’re no longer paying for Teams by default. This change also makes it easier to compare Microsoft’s offerings against competitors and build a licensing strategy that aligns with your budget and technology roadmap. 

From a strategic perspective, this move signals Microsoft’s willingness to adapt to regulatory pressure while prioritizing customer choice. It also opens the door for more competitive procurement processes, where organizations can evaluate tools based on functionality and value rather than bundled pricing. 

Adapting to Microsoft’s New Licensing Landscape 

Across the industry, technology leaders are reviewing their current agreements and planning for renewals under the new model. Many are using this as an opportunity to reassess collaboration platforms, compare feature sets, and optimize costs. Others are exploring Cloud Solution Provider (CSP) agreements for added flexibility and considering how these changes affect long-term budgeting and governance. 

Ready to Simplify Microsoft Licensing with Sourcepass MCOE? 

Microsoft’s licensing changes are about giving organizations more control. By unbundling Teams, Microsoft is creating a more transparent pricing model and encouraging competition in the collaboration space. For decision makers, now is the time to review your licensing strategy, evaluate alternatives, and ensure your choices align with both cost and capability. 

Have questions or want to explore your options? 

Connect with one of our Microsoft licensing experts today and get guidance tailored to your organization’s needs.