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Microsoft 365 Licensing Changes: What You Need to Know


Microsoft Teams is no longer included in M365 and needs to be licensed separately

Changes to Microsoft 365, Office 365, and Microsoft Teams licensing effective April 1, 2024

On April 1st Microsoft unveiled a fresh approach to its commercial Microsoft 365 and Office 365 suites, specifically targeting customers outside Switzerland and the European Economic Area (EEA).

Realigning Global Licensing for Microsoft 365.

Microsoft has introduced significant changes to the subscription structure of Microsoft 365, Office 365, and Microsoft Teams licensing outside the EEA and Switzerland.

These changes signify a strategic shift in Microsoft’s approach to licensing and aim to provide greater consistency for its customers globally.

The key change announced in this update is the introduction of Microsoft 365 and Office 365 suites that do not include Microsoft Teams licensing. In addition, Microsoft will introduce a standalone Enterprise Teams service, tailored for enterprise business customers, but what does this mean for you?

Read on for further information on the changes, or get in touch with us today for advice on how these changes could effect you.

Existing Microsoft 365 Customers

For those already subscribed to Microsoft 365 or Office 365 suites with Teams, the transition brings new options without disrupting their current subscriptions. As an existing customer, you will retain the flexibility to use, renew, upgrade, or adjust your subscriptions as usual. Furthermore, existing customers can now switch to suites without Teams at the contract anniversary or renewal. You can also add new user subscriptions to suites without Teams or opt for the new Teams standalone offering alongside existing suites.

Here’s a breakdown of the key updates:

For Customers Outside the EEA and Switzerland:

  • New Subscription Structure: Starting April 1, 2024, new commercial Microsoft 365 and Office 365 suites outside the EEA and Switzerland will not include Teams.
  • Existing Customers: Existing customers can continue using their current suites, including renewal, upsell, and seat adds. However, net-new subscribers who require Teams will need to purchase a separate Microsoft Teams Enterprise subscription alongside their Microsoft 365 or Office 365 suite.
  • Options for SMB and Frontline Customers: SMB and frontline customers will have the choice between existing suites with Teams or new versions without Teams.

For Customers Within the EEA and Switzerland:

  • Previous Changes: Since October 1, 2023, Microsoft has updated licensing in these regions, aligning with customer needs and addressing concerns raised with the European Commission.
  • Impact on Existing Customers: Existing customers can renew and add seats to their current plans as usual. Net-new subscribers requiring Teams must purchase a separate Teams subscription alongside their Microsoft 365 or Office 365 suite.

Recommendations for Multinational Organisations in Europe:

For multinational organisations with a presence in Europe, the choice between “no Teams” suites and “EEA (no Teams)” suites depends on their geographical coverage.

Organisations can opt for “EEA (no Teams)” SKUs to cover enrollments and tenants within the EEA and Switzerland. Conversely, they can acquire “no Teams” SKUs for enrollments and tenants outside these regions, ensuring compliance and alignment with regional licensing requirements.

The Difference Between Microsoft Teams Enterprise and Essentials:

  • Microsoft Teams Enterprise provides features such as meetings, chat, calling (VOIP), and collaboration without seat number limitations, coupled with a cap of 1000 attendees for meetings.
  • Microsoft Teams Essentials, unchanged by these updates, delivers meetings, chat, calling (VOIP), and collaboration worldwide for up to 300 users, maintaining a meeting attendee cap of 300 seats.

These adjustments aim to streamline licensing structures, enhance flexibility, and ensure customers can leverage Microsoft 365 and Teams capabilities effectively while aligning with regional requirements and preferences.

Next Steps:

The recent licensing update announcement will have minimal impact on customers within the EEA and Switzerland. However, Microsoft plans to introduce new Microsoft 365 E3 and E5 Unified EEA Cloud Add-On SKUs and move previous SKUs back to the public pricelist for existing enterprise customers.

At Krome, we are committed to helping you navigate these changes seamlessly. Our expertise as a Microsoft Direct Cloud Solutions Partner and Microsoft Gold Partner ensures that you receive the support and guidance you need to make informed decisions about your Microsoft 365 licensing.

For further information, please refer to the official announcements from Microsoft and feel free to contact our team with any questions or concerns.