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Microsoft Teams Licensing Explained

Michael ~ Modified: July 3rd, 2024 ~ Microsoft Teams ~ 10 Minutes Reading

Microsoft Teams has become one of the most popular communication tools for businesses because of its easy-to-use user interface and its wide range of services. whether or not you’re an existing Microsoft user, the aim of this article is to explain the Microsoft Teams licensing. This is to ensure that if you need a single communication solution that can do everything for you. Our aim is that, at the end of this article, you will know exactly which plan you’ll need, the features you’ll get, and at what cost. 

There are many different Microsoft Teams licencing offered for different ranges of uses that an organisation requires. In total, there are 10 different Teams plans offered by Microsoft and they are categorised as follows:

  • 3 in home plans category
  • 4 in the business category
  • 3 bundle plans 

The home plan category is suitable for individuals, and the business plans are suited for small and medium-sized organizations. But, before we discuss Microsoft Teams licensing further, we need to understand what Microsoft Teams is.

What is Microsoft Teams?

Teams is a collaboration tool that is integrated with various Microsoft programs such as OneDrive, SharePoint and much more. This is a chat-based meeting tool that offers various features such as video conferencing, and sharing files. It also can schedule and track projects and many other services according to the business requirements of today.

You can use Microsoft Teams internally at no cost. anyone can download the Teams application even if they don’t have the Office 365 licence. Without this licence, Teams will not be able to integrate itself with other Office 365 services. The service that allows you to call your customers, partners, and clients outside the organisation using Teams is called “PSTN Breakout” which you can purchase separately except for Office 365 and Microsoft 365 Enterprise E5 Licence.

Using the External calling feature will cost you more on top of the standard licence. Since anyone can install the Teams application for free, it can be used for internal communication with every Microsoft license.

Microsoft helps you manage all forms of communication for your business through Teams. 

Also Read: Detailed Guide For Microsoft Teams Security Best Practices

Which Licenses Includes Microsoft Teams?

You will notice that businesses have two options: Business and Enterprise plans. The home licenses are targeted at families that are large. There are licenses offered for educational institutions. We are mainly going to focus on the business and enterprise plans as the home users have simple requirements can it is very easy to find your own way around getting these plans. For educational institutes and non-profits, we encourage you to get in touch with Microsoft to get licensing agreements directly from them.

Microsoft 365 Business licences were developed to be suitable for organisations that have fewer than 300 members. These users would require the most basic tools for their productivity.

Several Office 365 subscriptions include Microsoft Teams. These include:

  1. Microsoft 365 Business Basic Plan.
  2. Microsoft 365 Business Essential Plan.
  3. Microsoft 365 Business Premium Plan.

The Microsoft Teams Essential Plan includes just the Teams service while the other plans include various other services such as Excel, PowerPoint, Outlook, and much more.

Let’s discuss each of these Microsoft Teams Plans in detail:

  • Microsoft Business Basic Plan

This is the cheapest option that users can get. It offers only web and the mobile versions of Microsoft services such as word, PowerPoint, Excel. Cloud services such as OneDrive, SharePoint, Exchange, and Teams is also offered in this plan. Since there are only web and mobile versions of the services available, so we would not recommend that it is a good option for most of the users. A business could try this plan out and then upgrade later if it no longer fits the requirements of the business. 

  • Microsoft 365 Business Essential Plan

This is the cheapest license that offers desktop version of all the Office applications. This plan also includes services such as OneDrive, SharePoint, and Outlook. We recommend that this is the most suitable plan for most of the businesses.

  • Microsoft 365 Business Premium

This plan includes features of all the other plans and also includes Azure information Protection, and Intune additionally. This means that businesses get access to Microsoft’s advanced administration tools. The IT admin for your organisation will be able to better enforce malware protection, wiping devices remotely, deploying Office application and updating these applications automatically. 

If your business prefers to manage all the admin related tasks centrally, then this plan would be a good fit for you. If these additional security features are not compelling to you, and feel like you need more than what the business premium plan offers, then you can consider opting for one of the enterprise plans.

Features of the Different Plans

Teams Essentials Plan Microsoft 365 Business Basic Plan Microsoft 365 Business Standard Plan
300 participants can join a meeting Web and Mobile versions are available desktop versions of Word, Excel, PowerPoint, and Outlook are available.
There are hundreds of collaborative apps 10+ additional apps for your business needs (Bookings, Planner, Microsoft Forms, and others) Video editing and design tools with Clipchamp
Unlimited chats for coworkers and customers are available Provides Custom business email. Attendee registration and reporting are available in webinars.
Collaborative annotations in Teams meetings Spam and malware filtering is done automatically. Collaborative workspaces to co-create using Microsoft Loop
10 GB of cloud storage per user 1 TB of cloud storage per employee Microsoft 365 offers Copilot as an add-on.
Microsoft whiteboard is available. Anytime phone and web support –

Add-On Licenses Explained

 Licence Overview 
Microsoft Teams Premium This is an add-on licence that helps organizations with Office 365 subscriptions and Teams licenses. This allows them to enhance the teams experience such as intelligent meetings, Protection for meetings, and advanced management capabilities. 
Audio Conferencing This is an add-on license that enables users to use phones instead of their computers to call to a team meeting. 
Teams Phone Standard Teams phone standard is an add-on license that provides hosted telephone service. This is Private Branch Exchange capabilities, such as cloud voicemail, call forwarding, transfer of calls, caller ID, call queuing, and more. 
Microsoft Teams Calling Plans This is an add-on license that makes calls to PSTN. By using this option, Microsoft becomes your PSTN carrier. If you have a Teams phone already and if the calling plan is available in your region, then you can get the Calling plan option. 
Communication Credits This is an add-on license that allows users a monthly pool of minutes that they can use for PSTN phone calls. If you want to purchase credits for communication, if your calling plan minutes get used up. You can also get toll-free numbers for audio conferencing, call queues, and auto-attending of calls. 
Microsoft Teams Rooms  This add-on license gives you access to video, audio, sharing content, and much more. 

Teams Room Basic is a free license tool for up to 25 rooms that gives users core meeting and management functions. 

Teams Room Pro enhances the meeting experiences and management and security to help users operate their devices at scale and enable hybrid meetings
Microsoft Teams Shared Devices Microsoft Teams Shared Devices add-on supports hybrid work by allowing offices to make designated devices as shared devices. 

What is the Right Plan for You?

Teams is meant to be an easy-to-use, professional meeting solution with video conferencing, and audio calling included. This includes 30 hours of calling, up to 300 members can participate in a meeting, and 10 GB of cloud storage per user with Teams Essentials.

To get the full Microsoft 365 experience, you need to opt for Microsoft 365 Business Basic Plan which includes features like Excel, PowerPoint, Outlook, and more on top of Teams and 1TB of Cloud storage is also offered. 

What is Microsoft Teams Phone

Microsoft Teams Phone can be added-on to the Microsoft Teams. It is officially called the Microsoft Teams Phone Standard, and these licences offer features of Teams phone system that is on a per-user basis. It includes features such as:

  1. Cloud voicemail
  2. Call forwarding
  3. Caller ID
  4. Call queues
  5. Transferring of calls

This extra licence is already included in plans such as Office 365 E5 and Microsoft 365 E5. If you have the highest level-suite license, then you already have access to Microsoft Teams Phone Standard. If you have the original suite, then you will have to purchase the add-on per user license. Frontline workers (F1 or F3) can avail a special discounted cost. There is no licensing fee for users that use Teams on desktop or mobile.

Types of Licenses Offered by Microsoft Teams

Type of License Features Type of Business it is Ideal For
Phone Standard Voicemails, Calls over the cloud, 3,000 minutes per month. It is ideal for businesses with robust phone system needs. 
Advanced Communications Making custom branding, and large live events.  Events that are large scale, and businesses with advanced needs. 
Exploratory Trial features and basic Teams use. It is ideal for businesses that want to explore Teams initially. 
Room Pro Offers advanced analytics, and manages the capacity of a room.  Businesses that have advanced meeting room requirements. 
Room Standard Management of meetings, integration with calendars, offers whiteboard.  It is ideal for businesses that need digitally enhanced physical meeting spaces. 
Shared Devices Shared devices access, and offers hot desking.  Ideal for businesses that need shared workspaces. 
Phone resource Account Can assign numbers to resources, and call receiving feature is available.  Phone management that is resource-specific. 

How and Why to Upgrade Between Plans?

Many plans are available by Microsoft to fit the needs of a variety of businesses but over time, these businesses’ needs may change and hence, they might want to choose a different plan that is suitable for them. In this case, they would have to shift all their files and data along with their channels and chats to the other plan. 

Microsoft does not offer any way for users to shift between plans, but luckily an automated tool called Migrator Wizard Teams Migration Tool which will make the migration process easier and save a lot of time. 

Download Now Purchase Now

This tool offers the following features: 

  1. Helps migrate teams data in bulk.
  2. Supports different Office 365 plans.
  3. Provides mapping between source and destination.
  4. Migration can easily be re-run.
  5. Maintains the data integrity.
  6. Generates a detailed report of the migration.
  7. Helps keep file folders and timestamps intact. 

Also Read: How to Move Files from One Teams Channel to Another – Reliable Approach

Conclusion

Microsoft Teams is a very popular communication tool because of its easy-to-use user interface. It is a collaboration tool with video conferencing and calling features built in. It also can schedule and track projects and many other services according to the requirements.

There are various Microsoft Teams plans and it could be confusing to choose a plan that is a fit for a particular business. More often than not, when the needs of a business change, they need to change their plans to maximize their productivity. Unfortunately, Microsoft does not offer any method for a user to shift their files and data So, it is necessary to use an automated tool that safely migrates all the files and data to its destination.