On November 1, 2025, Microsoft underwent a major overhaul of its productivity suite licensing following years of EU antitrust pressure. The move was hailed as a victory for the competition. Slack, which filed the original complaint, celebrated the outcome. Not only can businesses now purchase Microsoft 365 without Teams connected, but Microsoft has also had to improve how competing communications tools integrate with its software ecosystem. For companies that are tied to Microsoft 365 but prefer Slack or Zoom, this was supposed to be liberating.
But for most companies, the reality is less triumphant. The $8.55 per user per month savings from deleting Teams may be offset by increased management complexity, loss of ecosystem synergies, and premium costs of third-party alternatives, making this move redundant. Meanwhile, businesses face additional costs as Microsoft scraps traditional volume discounts and pushes AI-powered “Copilot” bundles.
The Teams unbundling story consists of one of the newly discovered choices, but one problem replaced by another. To understand why, we need to look at what actually changed in November 2025 and what the current management costs are.
What actually changed in November 2025
The roots of the November 2025 restructuring go back to July 2020, when Slack filed a formal antitrust complaint with the European Commission. The argument was simple. By bundling Teams with Office 365 and Microsoft 365 at no additional cost, Microsoft has leveraged its dominant position in productivity software to crush competition in the collaboration market. The committee’s investigation found the claims to be valid. To avoid a fine of up to 10% of global sales (about $24.5 billion), Microsoft proposed a series of commitments in May 2025, which were officially approved in September.
The promise, legally enforceable for seven years, required Microsoft to offer versions of its suite without Teams at a discount, allow existing customers to switch from bundled packages during renewals, and improve interoperability of technologies from competitors. Although the Commission’s focus was the European Economic Area, Microsoft chose a global launch to maintain operational consistency and preempt similar regulatory action elsewhere.
Microsoft has reintroduced the ability for customers worldwide to purchase the Microsoft 365 and Office 365 Enterprise suites that include Teams, rolling back the global unbundling that went into effect in April 2024. However, the “no Teams” version remained a permanent, cheaper alternative. This created a dual-track licensing reality. Organizations must now explicitly choose between an integrated ecosystem and a modular approach.
The most important mechanism is the “price delta,” which is a fixed cost difference between a product line with Teams and a product line without Teams. In the enterprise tiers (E3 and E5), Microsoft has set a minimum delta of $8.55 per user per month. This delta is not simply a pricing choice, but a regulatory requirement designed to ensure that Teams components have transparent and separable economic value. Microsoft Teams Enterprise is available as a standalone product for exactly $8.55 per user per month, achieving what the company calls “economic neutrality.” This means that organizations that choose the unbundled suite and add Teams separately later will pay the same total amount as organizations that license the bundled suite from the beginning.
On paper, it looks like a choice. In reality, it introduces administrative and financial complexities that few organizations are prepared for, and many now find it more expensive than the bundle.
Will unbundling increase my total spend?
The promise of unbundling was simple. The organization saved $8.55 per user per month by deleting Teams and choosing a best-of-breed alternative. For a business with 10,000 users, this amounts to a theoretical monthly savings of $85,500. But the financial reality is much more complex.
Simon Gammon, Director of Cloud Services at NexusDescription: “Across the organizations we support, Microsoft’s decision to separate Teams from certain enterprise licenses has not saved most customers money. In many cases, it has increased total cost of ownership while introducing new layers of procurement and licensing complexity.”
The problem is twofold. First, the $8.55 savings is quickly eaten up by the cost of third-party collaboration tools. Slack’s Pro plan seems a little cheaper at $7.25 per user per month, but it lacks the deep integrations and advanced features that many businesses require. Upgrading to Slack’s Business+ plan, which includes SSO, advanced AI digests, and enhanced security, costs $15.00 per user per month. For an organization with 10,000 users, this is $150,000 per month.
Second, unbundling exposes redundancies and compliance gaps. Tyler Higgins, Executive Director, AAreteNote: “Unbundling has exposed widespread redundancy and compliance gaps, with organizations holding redundant licenses or paying for users who no longer need full collaboration access. In practice, this creates a scenario where unbundling changes cost visibility rather than cost burden.”
The most significant long-term financial impact comes from dismantling the existing enterprise contract discount structure. Although not directly related to the Teams unbundling, that timing meant that costs would appear together.
Starting November 1, 2025, Microsoft will begin eliminating tiered discounts for all online services. Organizations that renew after this date will transition to the flat-rate pricing model. For large enterprises that have historically benefited from the Level D discount (typically 15,000 seats or more), eliminating this discount means a significant increase in IT spending. According to some estimates, the number of organizations renewing in 2026 will essentially increase by 12% to 15%.
teaOmás O’Leary, Founder and CEO of Origina“The concern we are hearing from enterprises is that when unbundling is used to repackage existing functionality in a way that increases total cost of ownership, adds procurement complexity, or pressures customers to maintain the status quo at higher prices, it begins to feel coercive rather than supportive of choice. Rather than stand still or make decisions based on the vendor’s schedule, many organizations are now being asked to simply pay for their own.”
For most companies, the complexity of unbundling, loss of volume discounts, and higher costs of third-party alternatives resulted in a net increase in spending.
A competitive opening that never materialized?
Unbundling was supposed to open the market to competitors like Slack, Zoom, and Webex. However, market share data for 2025 and early 2026 tells a different story. By the end of 2025, Microsoft Teams will reach up to 320 million daily active users, accounting for more than 40% of the global collaboration platform market. Slack’s market share remained at around 13% in the same segment.
Cavell Director of Research Patrick Watson“Microsoft’s move was too little too late. By the time Teams was separated from the broader Microsoft 365 suite, it had already reached more than 300 million users and was deeply embedded across core productivity applications. Our research of over 400 Teams decision-makers in the UK and US shows this clearly: 86% bought Teams as part of a 365 bundle, and 84% said they would buy Teams even if it were standalone. In other words, the impact of unbundling on the market. “The impact was very limited.”
The competition between Teams and Slack has evolved into a segmented competition based on company size and industry rather than a broad market rivalry. Teams remains the default choice for 90% of Fortune 500 companies who value deep integration with Microsoft 365 governance and security capabilities. Slack, on the other hand, dominates organizations with fewer than 500 employees, holding a 52% market share in that segment.
Higgins offers a cautious view: “Unbundling should create opportunities for competitors, but the benefits are more selective than many might expect. Platforms like Slack can gain traction in target environments, especially if procurement teams are already running sourcing events tied to broader software rationalization efforts. Nonetheless, in most large organizations, a large-scale replacement is unlikely to occur. Teams is deeply integrated into operating procedures.”
What has the unbundling team actually achieved in the UCaaS market?
The November 2025 unbundling of Teams is designed to restore competitive balance in the unified communications market. On paper, it was a success. Businesses now have the explicit right to purchase Microsoft 365 without Teams, and competing platforms have secured promises of improved interoperability. However, the gap between regulatory intent and market reality remains wide.
For most companies, unbundling has not been a meaningful option. The savings of $8.55 per user are absorbed by management overhead, compliance risk, and premium costs for third-party platform integration. Simultaneously eliminating volume-based Enterprise Agreement discounts added to the financial burden, with organizations facing base cost increases of 12% to 15%. This far outweighs the theoretical benefits of modular licensing.
Competitors gain technological access but not market traction. Teams’ dominance in the enterprise sector remains unwavering, with 90% of Fortune 500 companies continuing to use Teams as their primary collaboration platform. Slack and Zoom have gained a foothold in certain segments, but large-scale replacement has not materialized. For many, unbundling arrived too late to prevent the ecosystem lock-in that currently defines the UCaaS landscape.
Perhaps the most important consequence is one that regulators did not anticipate: a shift from product bundling to data and AI-driven locking. As Microsoft adds Copilot and other AI services to its productivity suite, the value proposition is no longer about whether Teams is “free.” It’s about whether your organization’s entire data estate is optimized for Microsoft’s intelligence layer. In this context, isolating a single application feels like a hindrance rather than the freedom to choose the best of breed.
Unbundling may have satisfied antitrust provisions, but it has yet done little to change the balance of power in the UCaaS market. If anything, it has strengthened the gravitational pull of the Microsoft ecosystem, proving that dominance built on integration is much harder to break up than dominance built on price.