As of April 1, 2024, Microsoft has introduced significant changes to its Microsoft 365 licensing options, impacting organisations purchasing net-new Enterprise licences. These changes aim to provide greater flexibility and cost savings for customers while maintaining the full functionality of Microsoft 365 through optional add-ons.
If you’re a current Microsoft 365 user or planning to onboard your organisation, here’s everything you need to know about how these changes affect you and your licensing strategy.
What’s Changing?
Microsoft is discontinuing the sale of net-new subscriptions for the following bundled licences:
- Microsoft 365 E3/E5
- Office 365 E1/E3/E5 Enterprise SKUs with Teams
Instead, all net-new purchases of these Enterprise licences must be through the “No Teams” plan. Organisations that require Microsoft Teams functionality can purchase the Microsoft Teams Enterprise plan separately as an add-on. More information here on the changes from Microsoft.
Impact on Existing Subscriptions
For customers already using bundled Microsoft 365 plans that include Teams:
- You can continue using your existing subscriptions and renew, upgrade, or add licences without changes.
- At renewal, you may choose to transition to the “No Teams” licences if it aligns better with your organisation’s needs.
- Mixed licensing is allowed, meaning you can combine “No Teams” plans with existing bundled licences within your organisation.
Importantly, there is no price increase for existing customers retaining their current plans.
Impact on Net-New Subscriptions
If your organisation is purchasing Microsoft 365 licences for the first time or adding net-new Enterprise licences:
- The default option will now be the “No Teams” licence.
- To include Microsoft Teams functionality, you’ll need to purchase the Microsoft Teams Enterprise add-on separately.
This approach allows organisations to evaluate whether Microsoft Teams is necessary for all users, providing opportunities for cost savings.
Opportunities for Organisations
The updated licensing structure opens up opportunities for organisations to streamline their technology stack and optimise costs:
- Cost Savings:
- Evaluate users who don’t require Microsoft Teams and purchase the more affordable “No Teams” licences for them.
- Reduce licensing costs by avoiding redundant collaboration/conferencing tools.
- Simplified Collaboration Software:
- Review your organisation’s software ecosystem to remove overlapping tools.
- Focus on deploying a unified platform that meets your organisation’s needs without unnecessary duplication.
- Flexibility and Customisation:
- Mix and match licences to fit different user roles, ensuring you only pay for the features each employee needs.
Why Kloudify Can Help
Licensing changes can be confusing, especially with new naming conventions, bundled options, and evolving organisational needs. At Kloudify Technologies, we specialise in helping organisations:
- Evaluate their current licensing usage.
- Identify opportunities to reduce costs and optimise budgets.
- Transition to the best-fit Microsoft 365 solutions for their business goals.
Our team has extensive experience assisting clients with licence reviews and guiding them through these types of changes to ensure a smooth and cost-effective transition.
Get Expert Guidance Today
Navigating Microsoft’s new licensing model doesn’t have to be a challenge. Contact Kloudify today to schedule a consultation and let our experts help you make the most of your Microsoft 365 investment.