When Microsoft separated Teams from its Office 365 and Microsoft 365 suites, initially in the European Economic Area and subsequently worldwide, the stated purpose was regulatory. The practical effect was that organizations gained a cheaper suite option, and a meaningful number of them took it — some because they had standardised on Slack, Zoom or Google Meet, and some purely because the line item was smaller.
The July 1, 2026 pricing update changes that calculation, and it does so asymmetrically. The suites without Teams receive larger percentage increases than their bundled equivalents across the board.
The numbers
Office 365 E3 without Teams rises from 14.45 to 17.45 USD, twenty-one percent, while Office 365 E3 with Teams rises from 23.00 to 26.00, thirteen percent. In both cases the absolute increase is three dollars, which is the mechanism: Microsoft is applying a flat dollar movement to a smaller base, and the percentage follows.
The same pattern repeats throughout. Microsoft 365 E3 without Teams rises eleven percent against eight percent bundled. Office 365 E5 without Teams rises ten percent against eight. Microsoft 365 Business Basic without Teams rises twenty-three percent against roughly seventeen. Business Standard without Teams rises sixteen percent against twelve. Frontline F1 without Teams rises forty-three percent, the largest single percentage in the commercial table.
The delta between the with-Teams and without-Teams price — effectively what Microsoft charges for Teams inside the suite — stays constant in dollar terms while everything around it rises. Teams therefore becomes a progressively smaller share of the suite cost over time, which is exactly the outcome an organization choosing to unbundle was trying to avoid.
When unbundling still makes sense
There remain two good reasons to hold a without-Teams SKU. The first is regulatory or contractual: some organizations have commitments that require them not to license a bundled communications platform, and that requirement does not care about pricing. The second is genuine platform standardisation — an organization that has deployed a competing collaboration platform, migrated its telephony, trained its workforce and built its compliance tooling around it is not going to reverse that decision over a three-dollar delta, nor should it.
What no longer holds is the third reason, which was the most common one: choosing without-Teams as a cost-reduction measure while Teams remained in use through some other licence, a legacy entitlement, or informally. That position was always fragile and is now more expensive per user than the bundled alternative relative to what it delivers.
The check to run
Pull Teams usage from the Microsoft 365 usage reports and compare it against your without-Teams assignment list. Any overlap is a problem in two directions at once: it is a compliance exposure, because those users are using a service the assigned suite does not entitle them to, and it is a commercial error, because the without-Teams path is not delivering the saving that justified it.
Where the overlap is significant, moving those users to the bundled suite at renewal simplifies the estate, resolves the entitlement question, and — after July 1 — costs proportionally less than staying put. Where the overlap is genuinely zero and a competing platform is fully deployed, the without-Teams SKU remains correct and the higher percentage increase is simply the cost of that architectural choice.
Do not forget the EEA precision adjustment
Separately from the main pricing update, Microsoft is applying small pricing precision adjustments — a matter of cents — to selected Microsoft 365 and Office 365 SKUs in EEA currencies including EUR, DKK, NOK, SEK and CHF, effective July 1, 2026, arising from an EU settlement compliance update. This is distinct from the global increase and should not be conflated with it when reconciling invoices in those currencies.
How Lorexus engages
We reconcile Teams usage telemetry against suite assignment, quantify the entitlement exposure, and model the with-Teams and without-Teams positions under the new pricing for your actual user mix. Where a move back to the bundled suite is the right answer, we sequence it against your renewal dates so the change lands at a term boundary rather than mid-cycle.