Is Teams Still Part of Office 365? What to Know About Microsoft Teams Licensing
- Updated: August 28, 2025
In this article...
- What “unbundling” Teams really means
- Who the Microsoft Teams licensing change impacts
- What it costs to add Teams back
- How pricing shifts by plan
- Common Microsoft Teams licensing questions
- How to build a smarter licensing strategy
It’s been over a year since Microsoft pulled Teams out of its Microsoft 365 and Office 365 bundles. At the time, the headlines were all about why it happened and what it meant. But now that the dust has settled, the real question is: what are your Teams licensing options today?
Whether you’re renewing an existing agreement, exploring new enterprise licenses, or running a mix of business and frontline plans, you’ve got choices. The challenge is knowing which option fits your team without adding unnecessary cost—or locking you into a setup that won’t age well.
This article breaks down where things stand now, what it costs to keep or drop Teams, and how to think strategically about your Microsoft licensing going forward.
Microsoft Teams Licensing Change: The Basics
Back in Spring 2024, Microsoft officially unbundled Teams from its enterprise Microsoft 365 and Office 365 plans worldwide.
Here’s the short version:
- New customers: You can’t buy Office 365 E1, E3, E5 or Microsoft 365 E3/E5 plans with Teams included.
- Existing customers: You can renew your current plan with Teams included—or move to a “no Teams” plan if you’d rather.
This move followed pressure in Europe around competition concerns. Microsoft made the change across the EU in 2023, and a year later rolled it out worldwide.
If you still want Teams with your enterprise license, you can add it back—but it costs an extra $5.25 per user/month on top of your plan.
Microsoft 365 Plans With and Without Teams
- Enterprise Plans (E1, E3, E5, Microsoft 365 E3/E5): New customers only get “no Teams” versions. Existing customers can renew with Teams or go without.
- Frontline Plans (F1, F3, Office 365 F3): You can choose with or without Teams.
- Business Plans (Business Basic, Standard, Premium): Same—choose with or without Teams.
If you’re in the enterprise space, the change is more restrictive. If you’re in SMB or frontline, you’ve still got flexibility.
How Much Do Microsoft 365 “No Teams” Plans Cost?
Microsoft reduced enterprise plan pricing by $2.25 per user/month when Teams is excluded. But here’s where it gets tricky: if you decide to add Teams later, you’ll end up paying more than if you had just kept it bundled.
For Business and Frontline plans, the difference is smaller—$0.50 to $2.25 cheaper without Teams—but if you change your mind later, you could be looking at a 50% to 200% jump in cost.
The takeaway: unless you’re certain you don’t need Teams, it usually makes more financial sense to keep it.
Common Microsoft Teams Licensing Questions
Q: When can existing customers remove Teams from their licenses?
A: Only during your renewal period, unless you choose to upgrade to a specific plan that excludes Teams.
Q: How do I know if I’m an existing customer?
A: If you had an active license with Teams included before April 1, 2024, then you are an existing customer.
Q: What happens if I switch Cloud Service Providers?
A: Currently, switching partners makes you a “new” customer to Microsoft, impacting Teams access upon renewal.
Q: Can I add standalone Teams Enterprise seats now?
A: Yes—and there is no minimum for these add-ons.
Q: Will I be able to mix bundled and unbundled suites?
A: Absolutely. You can have a mix of subscriptions with and without Teams within the same tenant.
Q: Does this affect government, academic or non-profit customers?
A: As of now, these industry sectors are not affected by the unbundling of Teams.
How to Think About Your Microsoft Licensing Strategy
Microsoft Teams has more than 320 million monthly users. For many organizations, it’s the backbone of collaboration. But not every business needs it—and some prefer alternatives like Zoom or Slack.
That’s why this licensing change is a good chance to step back and reassess:
- Are you paying for tools your team doesn’t use?
- Are you doubling up with overlapping subscriptions?
- Could moving to a mix of “with Teams” and “no Teams” plans save money long term?
Microsoft licensing can be complex, but it doesn’t have to be a headache.
At HBS, we help organizations untangle these decisions every day. We know the hidden costs. We know how to structure licensing so your team gets exactly what it needs—without overpaying.
Final Takeaway
So, is Teams still part of Office 365? Not automatically.
- New enterprise customers must buy Teams separately.
- Existing customers can keep it bundled—but only at renewal.
- Business and frontline customers have more choice, but also more risk if they try to add Teams later.
The smart move? Don’t wait until renewal to think this through. Review your options now, and set up a licensing strategy that balances cost, collaboration, and flexibility.
Need help navigating Microsoft Teams licensing? HBS can help you optimize your Microsoft 365 strategy. Connect with us today.
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