Reports suggest that Microsoft may decouple Teams from Office 365 to get ahead of an official EU antitrust investigation.
Microsoft first made the shrewd move to bundle Microsoft Teams with Office 365 all the way back in 2017.
However, it likely aided the meteoric, post-pandemic growth of the UCaaS platform – with Teams recently reaching 300MN active monthly users.
As a result, its competitors could only fight to play second fiddle, battling to become the Samsung to Microsoft’s Apple.
Moreover, the move caused many other vendors to change tact and build solutions that improve the Teams experience – even many of its UC rivals.
Lots of CCaaS providers have also done this, releasing contact center platforms that fit inside the native Teams UI instead of developing standalone solutions.
In addition, providers of analytics, collaboration, and many more technologies now compete on who can offer the most alluring Teams experience.
As such, Teams has become the first true platform solution to touch the CX space.
Yet, the EU’s investigation appears to have upset the apple cart, with some speculating that this could challenge the status quo.
Perhaps. Nevertheless, Zeus Kerravala, Founder and Principal Analyst at ZK Research, fears it’s too little too late.
“Too Little, Too Late” – Zeus Kerravala
“The problem with this is that it’s not enough,” noted Kerravala in a LinkedIn post. “Microsoft is talking about doing this AFTER it has reached a monopoly-like share.
If they really feel Teams is the best product, then unbundle products and provide a migration path to move the data that’s in Teams, particularly chat, out of the platform into a competing product. Frankly, this should be a requirement for all the vendors, including Webex, Zoom, RingCentral, and others.
“Only by making it easy to switch platforms will we find out who has the best product.”
Indeed, as Kerravala somewhat suggests, Teams has almost become the de facto choice, and it will likely take much more than this probe to change that in the short term.
Although, Microsoft has previously lost its leadership status after such an investigation.
Think back to the late noughties when EU courts deemed its Windows-Internet Explorer bundle anti-competitive. And look at Internet Explorer now… (oh wait, it has been retired ).
However, competitors such as Slack, which first complained to EU regulators about the Teams-Office offering back in 2020, can only hold onto a shred of hope that history will repeat itself.
Could the Move Be a Strategic Pivot for Microsoft?
While Microsoft may surrender a small chunk of its UC business in the short term, some have suggested that there could be a strategic element to the move.
Indeed, Sean Spradling, Senior Analyst at Wainhouse, told UC Today that it could offer Microsoft the chance to move Teams out from behind Office.
“Microsoft has approximately 450MN – between commercial and consumer – Office users,” said Spradling. “Most of those pay, but there is some level of free in there.
“So, at some point, you have to emphasize that these products aren’t exclusively connected in order to get towards the 750MN knowledge workers in the world.
[As such,] you’ve got to step outside of Office to continue growing, and I think Google’s base of workplace users is a valid target for Teams over time, as long as that decoupling is performed.
There is precedent for such a move – despite the aforementioned Internet Explorer fiasco.
In 2007, Microsoft vowed make it easier for competitors to design solutions compatible with the Windows operating system, hoping to escape an antitrust fine.
While Microsoft didn’t manage to elude a $1.35BN fine, the move paved the way for other providers to build on top of products in its portfolio – including Teams.
Ultimately, this allowed the tech pioneer to further differentiate itself from many market rivals.
Similar to that case, there may well be a strategy behind this move. Nevertheless, it is likely more of an appeasement than a strategic switcheroo.
Final Thoughts
Finally, it’s critical to note that the sources behind the reports – first shared by The Financial Times – remain unnamed, so nothing is set in stone.
Although, the reports are a source of encouragement to many of Microsoft’s UC competitors and offer food for thought to other CX vendors going to market with Teams-centric offerings.
For more on this story and others from the enterprise communications space, subscribe to UC Today and stay tuned for the next edition of its BIG News series – which Spradling’s quotes stem from.
