Microsoft has announce It will separate its Teams business collaboration software from the broader Office suite, following increasing regulatory scrutiny and complaints from rival Slack.
The changes take effect from October 1 (one month from today), and come in different forms depending on the size of the company. Institutional customers in the European Economic Area (European Economic Area), which consists of Switzerland and the 27 member states of the European Union (EU) plus Iceland, Liechtenstein and Norway, will now be able to purchase a Microsoft 365 or Office 365 subscription without Teams included, and you will be charged €2 less per month than before. Separately, Microsoft will offer Teams as a standalone product at a cost of €5 per month, but only for new customers.
Now, this is where things get a little complicated. Existing customers on an enterprise subscription can stay on their current plan — replete with Teams — if they wish. Or, they can choose to downgrade to the cheaper plan without Teams. For customers on one of the plans for small businesses or front-line workers, Microsoft said it will continue to bundle Teams with its broader software suite, but will also offer them a plan that comes without Teams at a lower price (this varies depending on the specific product and the country in which it is offered). . These customers will not be able to sign up for a separate, standalone Teams plan.
So, customers who have Teams as part of their Microsoft 365 or Office 365 subscription, but perhaps use Slack or a range of third-party tools to collaborate and communicate with each other, can lower their monthly expenses for Microsoft. However, only larger customers will be able to purchase Teams as a standalone product.
It’s worth noting that new enterprise customers who signed up for Microsoft’s productivity program and want Teams will pay more starting October 1. In fact, they’ll pay €2 less each month for the main Office suite, but since Teams will cost them €5 per month, that’s a total increase of €3.
Cut the slack
The crux of these changes likely goes back three years when Slack filed an antitrust complaint with EU authorities against Microsoft.
For context, Microsoft launched Teams in 2016, with Microsoft and Slack enjoying some “healthy” competition in the years since. However, Slack CEO Stuart Butterfield has become increasingly frustrated with Microsoft because of the way it has bundled Teams with Microsoft, mostly… He publicly calls out his rival on “active use” claims for Teams. In fact, Butterfield said Teams isn’t really being used as a replacement for Slack, and that companies tend to use Teams more for audio and video-based communications.
However, the long and short of its official complaint was that by bundling Teams, Microsoft was abusing its market dominance with Office to lure millions of workers to Teams. Furthermore, this didn’t offer any way to remove Teams or even see how much it would cost, since it was included in a broader subscription.
While Salesforce has since acquired Slack, the original complaint remains unchanged and the European Commission confirmed last month that it was proceeding with an in-depth investigation into Microsoft’s practices. Although it took a fairly significant three years to reach that stage, the committee said in July:
The Commission is concerned that Microsoft may abuse and defend its market position in productivity software by restricting competition in the European Economic Area (“EEA”) for communication and collaboration products.
In particular, the Commission is concerned that Microsoft may give Teams a distribution advantage by not giving customers the choice whether or not to include access to this product when subscribing to their productivity suites and may have limited interoperability between its own productivity suites and competing suites. . Offerings.
Treatments
With these changes, Microsoft clearly hopes to address at least some European concerns while controlling the details of treatments. However, the Committee’s concerns extend to other areas of the antitrust field, including the ways in which Microsoft may — intentionally or otherwise — restrict interoperability between its services and those of its competitors.
That’s why Microsoft said it will develop greater support and resources to support customers and developers looking to build integrations with Microsoft Office, or export data from Teams to other third-party apps. Additionally, it said it plans to “create new mechanisms” that allow third-party developers to host Microsoft Office web applications without having to build their own integrations.
“We believe these changes balance the interests of our competitors with those of European business customers, providing them with access to the best possible solutions at competitive prices,” noted Microsoft Vice President of European Government Affairs Nana-Louise Lind.
TechCrunch reached out to the European Commission, and while it said it takes note of Microsoft’s announcement, it has no further comment to make at this time.