Last year, the European Commission took a significant step by launching a comprehensive investigation into Microsoft’s practice of integrating its Teams application with the Microsoft 365 and Office 365 suites, targeting the business sector specifically. Microsoft, recognizing the importance of this inquiry, committed to fully cooperating with the Commission and expressed its determination to find solutions that would mitigate any regulatory concerns.

In a notable development reported by Reuters, Microsoft announced its decision to offer its Teams application globally—a chat and video conferencing tool—separately from its Office suite. This strategic move, coming six months after these products were decoupled in Europe, was designed to preemptively address potential EU antitrust penalties.

The strategic response from Microsoft to offer Teams separately

The investigation by the European Commission was triggered by a 2020 complaint from Slack, a Salesforce-owned workspace messaging application. Since its integration into Office 365 in 2017 at no extra cost, and its replacement of Skype for Business, Teams experienced a rapid rise in popularity. This was particularly true for its video conferencing features during the pandemic. Competitors have contended that this bundling strategy unfairly advantages Microsoft. In response to these concerns, Microsoft initiated the separate sale of these products in the EU and Switzerland on October 1 of the preceding year.

In detailing the company’s revised strategy through a blog post, Nanna-Louise Linde, Vice President for European Government Affairs at Microsoft, introduced a new pricing model for unbundled products. This adjustment, offering a reduction of US$2.17 monthly or US$26.02 annually, aims at serving the core enterprise clientele in the EEA and Switzerland more effectively.

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Furthermore, Linde clarified that Teams would be accessible as a standalone offering, with a pricing set at US$5.42 per month or US$65.04 annually, catering to new enterprise clients. Those who previously integrated Teams into their suite have the flexibility to maintain their existing setup or transition to a Teams-excluded package.

Reiterating the company’s dedication to transparency and customer satisfaction, a Microsoft spokesperson conveyed the decision to extend the unbundling initiative worldwide. This adaptation, inspired by the European Commission’s feedback, is intended to offer multinational corporations enhanced flexibility in their licensing options across various regions.

Reflecting on Microsoft’s historical adjustments in response to antitrust challenges, particularly the lawsuit from the Justice Department in 1998, analysts like Rishi Jaluria from RBC Capital Markets point out that the current separation of Teams from Office marks a significant, though not unprecedented, shift in strategy. Despite these changes, the integration of Teams into business operations suggests that the immediate impact on the market might be limited.

Data from Sensor Tower indicates a consistent user base for the Teams mobile app, with monthly active users remaining steady at around 19 million in both the fourth quarter of 2023 and the first quarter of 2024. This stability suggests that the unbundling in Europe has not adversely affected the platform’s popularity.

Looking ahead: Licensing flexibility and pricing strategies

With the introduction of new commercial Microsoft 365 and Office 365 suites, excluding Teams for areas beyond the EEA and Switzerland, Microsoft is also presenting a standalone option for enterprise customers. Starting April 1, these offerings allow customers to continue their current licensing arrangements or explore the new, unbundled options. The pricing structure for Office suites without Teams ranges from US$7.75 to US$54.75, with the standalone Teams option priced at US$5.25, although variations may occur based on country and currency.

Despite proactive measures, Microsoft could still encounter EU antitrust challenges, with concerns arising over pricing strategies and the interoperability of competing messaging services with Office Web Applications. Analysts like Gil Luria from D.A. Davidson suggest that Microsoft’s forward-thinking approach may somewhat mitigate future regulatory scrutiny. Given Microsoft’s history of incurring 2.2 billion euros in EU antitrust fines over the last decade for similar bundling practices, the company is keenly aware of the stakes involved.

J.P. Gownder, a Forrester VP and Principal Analyst, regards the unbundling of Teams as a strategic maneuver by Microsoft in anticipation of regulatory actions from the EU and possibly other regions. This strategy not only levels the competitive landscape by providing a choice to consumers but also simplifies the licensing landscape for multinational companies, which might face complexities under varying regional agreements.

Gownder also anticipates that pricing will emerge as a critical discussion point, with Microsoft potentially advocating for higher individual pricing for components formerly bundled, citing increased operational costs. This move could necessitate substantial marketing efforts to clearly communicate the value and structure of the unbundled offerings.

While Gownder foresees regulatory bodies potentially viewing any price increases critically, interpreting them as punitive measures against EU companies, he believes that the essential purchasing behaviors of enterprises, particularly outside the EU, are unlikely to be significantly altered. They may continue to favor bundled offerings, which are now enhanced by the addition of an unbundled option.

Gownder further speculates on the potential savings for organizations currently using Zoom, which might find financial benefits in dropping the Teams component for an unbundled SKU, though the exact financial implications will depend on the forthcoming pricing details. Zoom and Slack are poised to capitalize on this market shift, though the fundamental dynamics of the market are expected to remain largely unchanged.

The competitive landscape and potential beneficiaries

This strategic pivot could be an advantage for Zoom, which has faced challenges in competing with Microsoft’s comprehensive suite of communication tools. Slack, having been integrated into Salesforce and having previously lodged an antitrust complaint with the European Commission in 2020, has been particularly vocal about the need for such a separation, viewing the bundling of Teams with Office as competitively unfair.

Despite occasional preferences for Zoom, the integrated offering of Teams with Office 365 has consistently attracted customers. This trend was highlighted by CNBC, which pointed out Zoom’s slowing revenue growth from explosive rates in 2020 and 2021 to single digits in recent quarters. Mizuho analysts suggest that Teams’ unbundling could help mitigate some of Zoom’s challenges in retaining enterprise customers.

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Over the past year, Microsoft has reported nearly US$53 billion in revenue from its Office suite, including Teams, marking a 14% increase from 2022. The platform’s impact is undeniable, with Teams now boasting over 320 million active users monthly.

Salesforce’s acquisition of Slack in 2021 for US$27 billion, the company’s largest purchase to date, underscored the high stakes in the communication and collaboration tool market. Slack’s 2020 complaint to the European Commission against Microsoft’s practices highlighted ongoing competitive tensions, reminiscent of the ‘browser wars’ of the 1990s.

However, Slack’s stance towards Teams was more measured in 2019, with then-CEO Stewart Butterfield acknowledging the preference of many top customers for Slack over Teams, despite their use of Microsoft’s Office 365 suite.

Last year’s reports that Microsoft would allow companies to choose whether to include Teams in their productivity software subscriptions signaled a strategic shift intended to preclude further EU competition investigations. Subsequently, Microsoft began offering separate subscriptions for Teams and other productivity software across 31 European countries, aligning with the European Commission’s investigation into the bundling practices.

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It was only a matter of time before generative AI made its way into Microsoft Teams. Having already implementing it on other solutions and the Bing search engine, it was time to see how generative AI would perform on the communication tool.

As such, the latest development in the Microsoft Teams journey is the public preview of an all-new Microsoft Teams app for Windows. Since its 2017 debut as a teamwork hub within the Office 365 suite, Teams has experienced remarkable growth, evolving into an all-encompassing collaboration and communication platform. Now, Microsoft is taking it a step further by launching a completely new Microsoft Teams experience for users.

Microsoft has been attentively considering user feedback, leading to a complete reinvention of Teams. The revamped app is designed with an emphasis on speed, performance, flexibility, and intelligence, offering up to 2x faster performance while consuming 50% less memory, enabling efficient collaboration and time-saving.

Furthermore, the user experience has been refined for simplicity and convenience, consolidating features in one location. These improvements also set the stage for groundbreaking AI-driven experiences like Copilot for Microsoft Teams, which was announced earlier this month.

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Microsoft has been consistently making enhancements to the existing Teams apps; however, the most substantial breakthroughs are reserved for the new Teams. Here’s an overview of some of the key improvements Microsoft has brought to its Teams platform:

Speed

The primary goal for the new Microsoft Teams is to double its speed while utilizing only half of the system resources. To accomplish this, Microsoft has made a comprehensive investment in revamping the platform, optimizing data, network, chat, and video architecture for enhanced speed and performance. Although the optimization process for the new Teams is ongoing, promising results have already been observed from the public preview build released recently.

Collaborating with the independent benchmarking firm GigaOm, Microsoft has quantified some of these performance improvements, noting that app launch and meeting join times are now twice as fast, while memory consumption has been reduced by 50% in the new Teams preview compared to the classic Teams.

Performance

Continually striving to offer a streamlined yet feature-packed experience for their diverse and expanding user base, Microsoft is also introducing improvements to the core Teams experience. These enhancements aim to simplify notofication management, searching for information, handling messages, and organizing channels with minimal clicks, ensuring users can stay on top of their work effortlessly.

Collage of usability improvements in new Teams. (Source – Microsoft)

Flexibility

Microsoft understands that numerous customers have organizations extending across multiple tenants and accounts, prompting a significant investment in support for such scenarios. Enhancements have been made to the authentication model, synchronization, and notification systems to deliver a smooth and consistent experience.

For instance, when customers need to collaborate with individuals across organizational boundaries, they may use Teams across various tenants or accounts. Now, instead of constantly signing in and out of different tenants and accounts, users can remain logged in across all of them, receiving notifications regardless of the account currently in use.

Intelligence

This is probably the most anticipated part of the update. The new Teams serves as a foundation for cutting-edge AI experiences, incorporating previously announced features like intelligent recap and Copilot for Microsoft Teams. AI will be utilized to streamline collaboration, quickly catching you up on meeting or chat developments before you joined, and addressing your questions within the context of the conversation. This marks just the beginning of AI’s potential within Teams, and further advancements and announcements can be expected in the future.

By incorporating Copilot into their meetings and discussions, users also gain a powerful tool for handling routine tasks such as generating meeting agendas based on chat history, pinpointing suitable individuals for follow-up, and scheduling the next engagement. Below are a few sample commands and questions that Microsoft said users can experiment with:

Summarize what I missed in the meeting. What points have been made so far? Where do we disagree on this topic?

Create a table of pros and cons for [topic being discussed]. What else should we consider before making a decision?

What decisions were made, and what are some suggested next steps?

Will the new Microsoft Teams be available to the general public?

Microsoft has revealed plans to launch the new Teams later this year, with the public preview starting today for commercial customers using Windows.

A screenshot of the Teams app showing the new Teams toggle switch and the Classic Teams user experience being peeled away. (Source – Microsoft)

The public preview of Microsoft Teams allows users early access to unreleased features, enabling them to explore and evaluate upcoming functionalities. Enabled on a per-user basis, public preview doesn’t impact the entire organization and is controlled through an admin policy. Update policies help manage Teams and Office preview users, giving them access to pre-release features. Customizable policies can be assigned to specific users without overwriting the global policy.

Microsoft also intends to broaden the preview release to include customers using Macs later this year. Users in the Public Preview program will have immediate access to the new Teams, while a broader set of commercial customers will require admin opt-in. Afterward, end users will see a simple toggle to switch to the new Teams, with the option to revert to the classic Teams at any time.

This milestone signifies a new era for Microsoft Teams and a huge step forward for generative AI, with more developments in the horizon.

The post Microsoft brings Copilot to Teams, improves speed, performance and intelligence appeared first on Tech Wire Asia.

To be exact, Microsoft Teams were not able to communicate with anyone using the workplace communication tool. The problem which was initially thought to affect a few businesses was quickly realized to be a global one as many took to Twitter to voice out the outage.

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Microsoft 365 has since confirmed in a Tweet that they have received reports of users being unable to access Microsoft Teams or leverage any features. The tweet stated, “We’re investigating the issue and further updates can be found in your Service Health Dashboard via TM402718.”

According to DownDetector, a site that tracks outages by collating status reports from sources, nearly 5000 incidents involving the outage had been reported as of 10 pm ET.

About an hour after the outage was first reported, Microsoft 365 tweeted that they’ve determined that a recent deployment containing a broken connection to an internal storage service has resulted in an impact. The impact of which has caused Teams to go down around the world.

We’ve determined that a recent deployment contained a broken connection to an internal storage service, which has resulted in impact. We’re working to direct traffic to a healthy service to mitigate impact. Additional information can be found in the admin center under TM402718.

— Microsoft 365 Status (@MSFT365Status) July 21, 2022

Microsoft 365 added that their currently “working to direct traffic to a healthy service to mitigate impact.”

In a status update notice, Microsoft also stated, “the desktop app may sign in successfully, though all functionalities may be down, and users may see the following message: “We ran into a problem. Reconnecting…” Users leveraging the web client may see a message stating “Operation failed with unexpected error.”

Microsoft added that the scope of impact for the outage may potentially affect any user attempting to utilize the Microsoft Teams service.

As such, with most businesses relying purely on Microsoft Teams for workplace communication, the outage also serves as a good reminder to have a proper backup communication tool in place.

While many would consider using WhatsApp to communicate in times like these, there are other alternatives available in the market as well that can be integrated into the workplace to avoid any disruption.

The post Broken connection in recent deployment causes Microsoft Teams outage appeared first on Tech Wire Asia.

At a recent New York City event, Microsoft announced that it was launching ‘Teams’ which is described by the company as a “chat-based workspace that’s focused on real-time collaboration”.

In today’s crowded office chat app space, many companies have floundered when pitted against Slack – who have pretty much won the top spot as the go-to software for most companies. Amidst Slack’s popularity with users, it’s only natural that their competitors would take a leaf from their book.

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CEO Satya Nadella admits that the software, which will be tied to Office 365 subscriptions, will look “a lot like Slack and functions in similar ways with threaded persistent chats that can be open or private 1:1 sessions. It also includes a familiar-looking sidebar with meetings, files, chat, and activity notifications”.

In the tech product game, the winner is often the one who can execute on an idea in the best way and in the case of Slack vs. Microsoft – it would seem that the arrival of ‘Teams’ is making the former sweat.

In response to the newly-minted rivalry, Slack decided to welcome Microsoft as competition in the most brazen way possible – by taking out a full page in the New York Times and publishing an open letter (read the letter on Slack’s blog).

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The letter essentially offers “friendly advice” to Microsoft from the years that Slack has spent building their product and understanding their users, but it also admits that the idea of legitimate competition is “a little scary” but is also “validating.” The letter caps off defiantly with Slack saying that they are here to stay.

Slack isn’t the first tech company to offer a snide welcome to a competitor via a media outlet. This is similar to Rdio’s sarcastic shout out to Apple Music, which was inspired by Apple tipping their hat to IBM by using the Wall Street Journal in 1981.

A good omen for Microsoft, to be fair… pic.twitter.com/vSBuK4r4PR

— Ben Thompson (@benthompson) November 2, 2016

Not to be outdone, Facebook has also been getting into the office messaging game with the recently announced ‘Workplace’ (formerly ‘Facebook at Work’) which it has been testing out in private beta at 400 organizations around the world. The pros and cons for a Facebook-based office chat app are obvious — you hardly need to onboard users as everyone already has an account, but some may feel that boundaries between the professional and personal spheres should be maintained.

Either way, it’ll be interesting to see whether Facebook or Microsoft will be able to dethrone Slack in winning over users at work. We’ll be watching to see who emerges as winner.

The post Shots fired: Slack takes on rival Microsoft’s ‘Teams’ in full-page open letter appeared first on Tech Wire Asia.