Microsoft Teams

Microsoft Teams brings chat, audio and video calling, online meetings and web conferencing together with file sharing and collaboration, and integrates closely with the rest of Microsoft 365. Microsoft’s own service description calls it "the AI-powered platform for work".

Who it is for

Teams is the default answer for an organisation already paying for Microsoft 365. Its teams are built on Microsoft 365 groups, so creating one also creates a SharePoint site and document library, an Exchange shared mailbox and calendar, and a OneNote notebook. That coupling is the case for it: if your files, mail and calendar already live in Microsoft 365, Teams is where the conversation about them belongs.

There is also a free tier, which makes Teams a reasonable starting point for a small team that wants chat and meetings without a subscription — though most of what distinguishes it only arrives with a Microsoft 365 licence.

What it does

Standard, private and shared channels; chat; meetings, webinars and town halls; screen sharing; VoIP calling; and a third-party app platform. Guests and external users can be added, so it is not limited to employees. Telephony through Teams Phone is a separate add-on licence and needs a PSTN connection via Microsoft Calling Plans, Operator Connect or Direct Routing.

How it is licensed

This is the part that catches people out. Teams is sold three ways: a free tier, a standalone subscription, and bundled inside Microsoft 365. Microsoft Teams Essentials is the standalone small-business plan, listed at $4.00 per user per month paid yearly. Microsoft 365 plans that include Teams start around $7.00 per user per month paid yearly for Business Basic.

Since April 2024 Microsoft has sold its Business and Enterprise suites in two variants, with Teams and without it, on separate pricing pages — and new Enterprise customers buy an E1, E3 or E5 suite without Teams plus a Teams standalone licence. The same split took effect in the European Economic Area and Switzerland in October 2023. Check which variant you are buying before comparing prices with anything else.

Prices above are Microsoft's list prices for annual billing and vary by region, currency and billing term. Confirm the current figure on Microsoft's own pricing page.

If your organisation already pays for Microsoft 365, Teams is the default and the burden of proof sits with any alternative. The integration with SharePoint, Exchange and OneNote is the product rather than a feature of it, and you are very likely paying for it already.

If you are not on Microsoft 365 the argument is much weaker, and Slack is the fairer comparison. Start on the free tier rather than buying a suite to get a chat tool. Whatever you do, work out which licence variant you need first: since April 2024 Microsoft sells its suites with and without Teams on separate pricing pages, and the two are easy to confuse.