How changes to M365, O365, and Microsoft Teams licensing effect you

Background 

Microsoft announced on April 1st that they would be introducing new M365 and O365 suites that do not include Teams and a new standalone Microsoft Teams Enterprise offering and the existing Enterprise SKUs (M365 E3, E5 and O365 E1/E3/E5 enterprise) which include teams would be made end of sale.  

The aim is to bring the UK in line with worldwide licensing for M365 and Teams with the EEA countries and Switzerland which came into effect in August 2023.

The changes effect commercial SKU's only, at present non for profit, education and public sector SKU's are unaffected.   

New M365 Licensing SKU's 

To keep things really simple, if you use one of the Enterprise SKU's (below) Teams will no longer be included as part the O/M365 license SKU, there will be a separate "Teams Enterprise" SKU which will need to be purchased as well alongside the new O/M365 license SKU's in order to get parity. 

If you are using any of the Business or Frontline SKU's (Business Basic, Business Standard, Business Premium or Frontline SKU's (M365 F1, O365 F3 and M365 F3), then these SKU's will coexist with a new suite of Business and Frontline SKU's which will exclude Teams.  

Impact considerations

1. If you are using an Enterprise SKU, you will need to move to the new SKU's at your next renewal point (assuming this is after June 30th).   
2. You will not automatically be converted to the new SKU's upon renewal this will need to be done manually or in conjunction with your licensing provider to retain functionality. 
3. If your renewal is before June 30th, you will be able to renew on the existing plans up until this date for a further year and be able to add / upgrade licensing within those plans until the next renewal date.  
4. There will likely be either a slight cost increase (works out to be roughly £2.20 per user) for Enterprise customers that have the new SKU's 
5. Coversely, for clients that do not use or need Teams, there is the possibility to reduce licensing costs with the "no Teams" SKU's. 
6. The new "No Teams" SKU's for the UK are different from those introduced in the EEA and Switzerland.  Restrictions are in place to prevent customers within these tenants from ordering SKU's that fall outside of their tenancy region.   

Suggested next steps 

• Review your currently licensing estate and account for the licenses and user groups affected.  
• Review whether you have any PAYG licenses which are on a monthly rolling agreement which may be impacted outside of your annual renewal. 
• Take this opportunity to realign license allocation to user requirement.  Not all users need the same license.  This presents a compelling event to review the appropriateness of your licensing allocation.  
• Create a transition plan (if appropriate) ahead of your next renewal date, even if its basic.  Ensure that you have an mechanism for allocating the new licenses on or ahead of the renewal, if you let if lapse, services will be affected. 
• Speak to a specialist if you need support or guidance.