Key takeaways_

• Microsoft Teams licensing can be confusing, with options ranging from free plans to Business and Enterprise tiers.
• Each license offers different features for meetings, security and compliance, so choosing the right one depends on your organisation’s size and needs.
• Understanding these differences helps you avoid overspending and ensures your team gets the collaboration tools it needs.

While most of us would rather forget the coronavirus pandemic, there’s no denying it has brought long-term change to our lives. Most significantly, it’s affected the way many of us work, with home and hybrid working now becoming commonplace.

In a world where employees can be spread across multiple locations, it’s critical to keep everyone connected, wherever they are. This is where communication platforms become integral to business performance.

Microsoft Teams was a staple during the pandemic years and remains a core part of many businesses today. Going beyond video calls, it supports collaboration across your organisation, making it easier to meet performance goals and facilitate teamwork.

However, there have been some changes to how Teams is licensed in recent years. And if you’re considering implementing it, you’ll want the maximum value from your license.

This guide explains everything you need to know about Microsoft Teams licensing, so you can choose the right option for your business.

What is Microsoft Teams?

Microsoft Teams is a hub for teamwork that integrates chat, meetings, calls, files and apps. It is most famously known for its video call and conferencing capabilities, but it goes far beyond this. Here’s everything you can do in Teams:

Chat and collaboration features_

• Persistent chat: Teams facilitates real-time communication across teams. This is organised within channels around projects, departments or topics, so members can be in constant contact
• Direct messaging: Allow for private conversations with individuals or small groups
• File sharing and collaboration: Seamlessly share and co-author documents, spreadsheets, presentations and other files directly within the platform
• Mentions: Quickly notify specific team members or channels within a conversation, just with a @mention

Meetings and conferencing_

• Online meetings: Schedule and host online meetings with video conferencing, screen sharing and interactive features like whiteboarding and polls
• Team meetings: Easily schedule recurring meetings for specific teams or channels, giving everyone a chance to touch base regularly
• Guest access: Invite external participants to meetings and collaborate with people outside your organisation
• Meeting recording and transcription: Record meetings and generate automatic transcripts for easy review and reference

Teamwork and workflow_

• Teams and channels: Create dedicated teams and channels to structure work, facilitate discussions and manage projects
• Connectors: Integrate with various third-party apps and services, such as Trello, Jira and Salesforce, to streamline workflows
• Power Automate: Automate repetitive tasks and workflows within Teams using Power Automate, Microsoft’s workflow automation platform
• Planner: Plan, organise and track tasks and assignments within Teams

Apps and integrations_

• AppSource: Access a vast library of third-party apps, including productivity tools, communication platforms and business applications
• Customisable interface: Customise your Teams experience with personal tabs, apps and connectors

AI capabilities_

Alongside the above features, you can combine Microsoft Teams with your Microsoft 365 Copilot license to bring AI power to the platform. Features include:

• Summarise key discussion points for quick meeting follow-up
• Summarise information for Teams chat threads
• Catch up on what’s been discussed so far when running late for a meeting
• Suggested questions to ask to improve meeting engagement
• Ask for specific information from the meeting transcription (e.g. ‘what was agreed for X’)
• Use Copilot chat for content generation and knowledge gathering directly within Teams

This allows you to get even more from Teams.

How is Teams licensed?

Microsoft Teams is licensed as a subscription service, with an annual commitment required.

There are three options for businesses looking to implement Teams:

• Microsoft Teams Essentials (£3.30 per user, per month) – covering only Teams
• Microsoft 365 Business Basic (£4.90 per user, per month) – giving you access to Teams alongside other Microsoft tools like Outlook, Word, Excel, SharePoint and more
• Microsoft 365 Business Standard (£10.30 per user, per month) – giving you access to Teams alongside everything covered in Business Basic, webinar conferencing, Clipchamp and more

The table below gives you a full view of everything included in each plan:

Previously, Teams was included in E3 and E5 licenses also, but this changed in 2024. You will now need a separate Teams license on top of your E3 or E5 plans.

Each of the three options above will give you full access to Teams, with varying levels of functionality. However, the license you should choose will depend on the needs of your business – as we’re about to explain in more detail.

How to choose the right Microsoft Teams license and unlock maximum value_

Your Microsoft Teams license is a regular outgoing for your business and your subscription may last for many years. As such, you need a licensing strategy that suits your long-term needs and offers the best possible ROI.

Here are our top tips for doing this:

1. Conduct a needs audit_

The first step is understanding your licensing needs. For example, what specific features and functionality, and at what level, do you require? How many users need access?

Within this stage, you’ll also want to consider any Microsoft licenses you already have and where they fit into the picture. If you already have access to the Office applications, you may only need a Teams Essentials license rather than everything included in a Microsoft 365 license. Or you may discover it’s more cost-effective to move towards a license including Teams.

Once you know your licensing needs, it becomes far easier to decide which is the best option.

2. Rightsize your license_

Based on your audit findings, you need to find the rightsize license for your specific needs. This ensures optimal cost-effectiveness.

If you choose a license where not all features are being used, it means you could be paying more than the actual value you’re getting back. Choose one that doesn’t offer enough capability, and you’ll find users unable to achieve what they need to, which could lead to inefficiencies and frustrations.

Rightsizing not only reduces costs but also ensures that users have access to the necessary tools and features for their roles and responsibilities. So, map out your requirements onto the licensing options available to determine which is the best fit.

3. Leveraging free and trial offers_

If you aren’t sure what license will be best for you or want to check Teams is right for your business, consider starting with a free trial. Microsoft offer one-month free trials for Microsoft 365 Business Basic and Standard.

By using a free trial, you’ll get time to test features and functionality before you commit. You may also be able to get users used to Teams and gain feedback about how it benefits the business, as part of a small pilot program.

4. Work with a Microsoft Partner_

Microsoft leverage a network of Partners who help businesses discover, implement and maintain their technology. A Microsoft Partner can also discuss licensing options in detail and help you uncover the best route forward.

Partners will typically have worked with numerous businesses to implement platforms like Teams, so therefore know the nuances in each license type and can identify the right option for your needs. They can also offer advice to help you get greater value, train users, discover the best use cases and correctly embed your new solution.

If you are working with a partner, seek to find one with experience in Microsoft Teams and businesses like yours. For more tips on how to get more from your Teams license, visit our guide to unlocking ROI for your Microsoft licenses.

Explore licensing options_

Microsoft Teams can be included in many of Microsoft’s business and enterprise licensing options. We’ve put together the options available, what they cost and what else you get alongside Teams. Download it below.