It’s All About Feature Differentiation and Control

In February, Microsoft confused the Office 365 community by issuing message center notification MC238782 to announce a Teams Pro license. People didn’t know what Teams Pro is, what it would do, and if it would cost any extra.

Despite having every opportunity to clarify matters at the Ignite 2021 conference in March, Microsoft stayed quiet. Finally, on April 6, they updated MC238782 to clarify what’s happening. My interpretation of the text in the update as follows:

  • Microsoft is adding Teams Pro to Microsoft 365 and Office 365 E3/E5/A3/A5 and Microsoft 365 Business standard and Business premium licenses. In other words, users with these licenses don’t pay anything extra to get Teams Pro. MC238782 says that tenants should see Teams Pro added to the licenses in user accounts in mid-March, but I see no sign of it in any account yet.
  • Teams Pro is a service plan rather than a license. You can’t buy a service plan because Microsoft bundles them together to form products. A product like Office 365 E5 has a SKU to make it available to customers and is composed of multiple service plans, like SharePoint Online or Planner. Each service plan controls access to capabilities.
  • Microsoft will use the Teams Pro service plan to control access to “forthcoming Teams capabilities.” They have not specified what those new features are.

Pricing Flexibility

What I think is happening is that Microsoft wants to create some flexibility in how it controls different features within Teams. For example, the Office 365 E3 and Office 365 SKUs both include a Microsoft Teams service plan. The same service plan is used for both SKUs, and apart from Live Events (which are probably not all that interesting for small companies), no differentiation exists in the Teams features available to enterprise users than to those with the Microsoft 365 Business Basic license, which also includes Teams.

By introducing the Teams Pro service plan, Microsoft can restrict access to new features to people with enterprise and Microsoft 365 Business standard and premium licenses. Some of the folks with the lower-cost license might then decide to upgrade to gain access to the new features. Going from Microsoft 365 Business basic to Microsoft 365 Business standard is an extra $7.50/month (U.S.), so that’s a nice opportunity to grow highly profitable revenue.

Teams Pro and Teams Advanced Communications

The introduction of the Teams Pro service plan creates the question about what’s happening to the Teams Advanced Communications add-on and whether Teams Pro replaces the Teams Advanced Communications add-on. The answer is no. Teams Pro is part of a license whereas Teams Advanced Communications is a SKU which controls some additional functionality.

The problem for Microsoft is that the Teams Advanced Communications SKU has been a disaster since its introduction in August 2020. When originally launched, Microsoft wanted $12/month per user to license features like:

  • Scaling Live Events to deal with 20,000 participants. During the year, Microsoft allowed all tenants to run Live Events for up to 20,000 attendees.
  • Integration of Compliance Recording for Call Centers: Companies which needed to record conversations over Teams needed the add-on to use the API to capture voice data. Advanced Communications also allowed access to ISV-sold call center solutions. ISVs protested long and hard about Microsoft’s plan to require the add-on for access to APIs and Microsoft dropped the plan.
  • An increase in meeting size to 1,000 interactive attendees. This limit is now available to all tenants as part of the standard Teams offering along with automatic overflow for up to a further 20,000 view-only participants.
  • Custom branding to allow organizations to apply their own graphics to the Teams lobby instead of using the standard Microsoft branding.

It’s likely that customer demands for better meeting functionality because of the pandemic forced Microsoft to make features like large meetings available generally. As a result, custom branding is the only feature on the original list which Advanced Communications still controls. Microsoft has added two further features since, neither of which seem to justify the price tag:

  • Manage organization communications: Monitor, track, and analyze data on users and devices to ensure a smooth experience.
  • Tailored experiences with custom policy packages.

MC249777 (posted April 9) also says that the distribution of organization-wide background images will require a Teams Advanced Communications license once the preview period expires in July. This doesn’t add much to justify the license cost, especially as there’s no way to force people to use a specific background.

It’s obvious that Microsoft needs to go back to the drawing board to decide what functionality Teams Advanced Communications covers in terms of both existing and future features and then relaunch a better offering.

About the Author

Tony Redmond

Tony Redmond has written thousands of articles about Microsoft technology since 1996. He is the lead author for the Office 365 for IT Pros eBook, the only book covering Office 365 that is updated monthly to keep pace with change in the cloud. Apart from contributing to Practical365.com, Tony also writes at Office365itpros.com to support the development of the eBook. He has been a Microsoft MVP since 2004.

Comments

  1. Mark Lawton

    Hi Tony – I don’t think this bit is strictly correct,

    “For example, the Office 365 E3 and Office 365 SKUs both include a Microsoft Teams service plan. The same service plan is used for both SKUs, and no differentiation exists in the Teams features available to enterprise users than to those with the Microsoft 365 Business Basic license, which also includes Teams.”

    That is not quite true – Enterprise includes Live Events – Business does not.

  2. Laura

    That’s great news but when will the features of Teams be compatible with Macs?

    1. Tony Redmond

      That’s a question you should ask Microsoft. What features are you specifically concerned about?

  3. Catherine Mkhondo

    Interesting, thank you for sharing

  4. Karl

    If we have A3 (soon A5) and this is included in it, why call it something else? Very frustrating!

    1. Tony Redmond

      As explained in the piece, you won’t be affected by the change because both A3 and A5 licenses will include the Teams Pro service plan. The existence of Teams Pro will allow Microsoft to avoid making features available to lower-end plans… but those are new features, not what’s available today. And in any case, you have Teams Pro.

  5. Alister Mahabeer

    Hi,

    Do you know if common area phone licence forms part of this change.

    1. Tony Redmond

      As noted in the article, Microsoft hasn’t said what features they plan to cover with Teams Pro.

  6. Harald Holz

    is custom branding available ? i couldn’t find any resources for applying a branding with our advanced add-on

  7. John Timmerman

    Thanks for the added clarity Tony. Will be interesting to see how this all plays out.

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