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  • Writer's pictureSara Millis

Which is better? Microsoft Teams free plan vs Teams Essentials vs M365 Business

Struggling to choose between Microsoft Teams free plan, Team Essentials or M365 Business? Struggle no more!

In this comparison post, we will be looking at each Microsoft Teams package and giving you the full low-down on the pros and cons.

Let’s start by looking at what’s changed overall for Microsoft Teams.

Microsoft Teams video call (lady speaking with several team members)

How Microsoft reimagined Teams during Covid-19

Since Covid-19, businesses have had staff working out of the office more than ever before. We have had to learn terms like remote working and hybrid working and to figure out where they fit within our businesses.

Statistics show just how much our workplaces are changing.

24% of the UK workforce were employed on hybrid contracts in May 2022, according to the office of National Statistics. With a decrease in remote working from 22% to 14% (almost a perfect swap in numbers from the peak of the pandemic). Coupled with 85% of businesses feeling the pinch from The Great Resignation, it’s easy to see why more businesses are thinking about offering more hybrid or remote working options and not less.

This is where software as a service (SaaS) has had to make some changes.

Microsoft has certainly been paying attention and they have updated Teams to not only work with our new business models but to enhance our business productivity and efficiencies.

Microsoft Teams became the most popular workplace communication system during the pandemic and has remained so ever since (going from 75 million users to 145 million between April 2020 and April 2021 alone).

Teams is an all-in-one communication platform, which provides several options for your online work hub, including collaboration and communication.

Some of the key features of MS Teams include:

  • Video and audio calls

  • Webinar registration & attendance reporting

  • Channelled team chat

  • File storage and sharing

  • In-app collaboration in Word, Excel, PPT, and more

  • In-app collaboration in 3rd party applications

  • Tabs that allow teams to link apps and websites inside a channel

  • Status notification and alerts

  • Use on all devices

Microsoft Teams free plan vs Teams Essentials vs M365 Business

We often get asked, “is Microsoft Teams free?” To answer that properly we want to take you through each of the packages available so that you can understand what comes free and what doesn’t. More importantly, which is the right fit for your business.

Microsoft Teams payment plan comparison chart
Image from Microsoft Teams pricing page

What is the Microsoft Teams free plan?

In 2018 Microsoft launched Microsoft Teams (free plan) as a stand-alone product free from ties to Microsoft 365 subscriptions, meaning they could effectively compete with communication apps like Zoom.

The free plan was their taster plan, with reduced features and limited call times. It was originally targeted at the residential and home user. An audience that had been completely missing from the Teams user base up to that point. During the pandemic, however, it was smaller businesses that made up a higher percentage of Teams application downloads.

This plan included:

  • Unlimited group meetings for up to 60 minutes

  • Up to 100 participants per meeting

  • 5GB of cloud storage per user

  • Unlimited chat

  • File sharing, tasks, and polling

  • Data encryption for calls, files, meetings, chats

  • Co-authoring capabilities

  • Ability to add tabs inside group channels

The biggest problem for business users is that the free plan only comes with a 60-minute limit on group video meetings and 5GB of cloud storage. That's not enough to run a business from multiple locations, at least not on its own.

What is the Teams Essentials plan?

Teams Essentials was launched in December 2021 and was targeted toward smaller businesses that felt the free option lacked the features they most needed. As there is no need for a full M365 subscription the price point met the market’s needs during an unprecedented time.

Teams Essentials is £3 per user per month (plus VAT) and was designed specifically for small businesses who do not need a subscription to M365, but still need a good cloud collaboration tool to keep their team connected and productive.

This plan includes:

  • Everything in the free version, plus:

  • Unlimited group meetings for up to 30 hours

  • Up to 300 participants per meeting

  • 10GB of cloud storage per user

  • Anytime phone and web support

There’s no prize for guessing why this still is the most popular option for SMEs!

Unfortunately what it didn’t include was desktop and mobile versions of M365 apps, like Word, Excel and PowerPoint, which left business owners figuring out other ways to collaborate with their teams. In some cases, this meant subscribing to other document and productivity tools to plug the gap.

What is the M365 Business plan?

The M365 business plans for Microsoft Teams are the full subscription models and come with full features, via a tied M365 subscription.

Currently, that offer is split into three paid options.

Option 1 - Microsoft 365 Business Basic and £4.50 per month per user (plus VAT)

The package includes:

  • Everything in Microsoft Teams

  • Team meetings recordings with transcripts

  • Web and mobile versions of Office apps (Word, Excel and Powerpoint)

  • Expanded cloud storage of 1 TB per user

  • Business-class email

  • Standard security

  • Apps like - Teams, Exchange, OneDrive, SharePoint and Outlook

Great for those businesses who want one tool to rule them all!

Option 2 - Microsoft 365 Business Standard £9.40 per month per user (plus VAT)

The package includes:

  • Everything in Microsoft 365 Business Basic

  • Desktop versions of Office apps with premium features

  • Webinar hosting

  • Attendee registration and reporting tools

  • Manage customer appointments

  • Extra apps - Publisher (PC only)

  • Access (PC only)

In our experience, this is for the larger business or a business that needs more sales team tools, like customer appointment planning and targeted sales webinars.

Option 3 - Microsoft 365 Business Premium £16.60 per month per user (plus VAT)

The package includes:

  • Everything in Microsoft 365 Business Standard

  • Advanced security.

  • Access and data control.

  • Cyberthreat protection.

Again this option is targeted at larger businesses primarily, especially where they wish to take control of their data security needs in-house.

Image of person about to sign into Microstoft teams on their mobile phone

Which Microsoft Teams plan is better for your business?

Every business is different and with such a wide choice on offer from Microsoft, asking “which Microsoft Teams plan is better for my business?” is perfectly reasonable.

Understandably we can’t give you that definitive answer. What we can do though, is guide you through how to make that decision.

Here are our 5 steps in working out which Microsoft Teams package is right for your business

  1. Prioritise your needs - Take a bigger picture view of your core business workflows. Which departments need access to files and how do you need them to communicate? Remember implementing a new software solution is an opportunity to tighten your efficiencies and help your team be more productive. Talk to department heads and staff to find out what they think could be improved.

  2. Think budget - Ultimately your cash flow will give you an indication of what you can and cannot afford. If you are opting for a Teams solution to replace one or more current software providers, then how will this impact your choice?

  3. Create your shortlist - It will be obvious which plans you will automatically discount from your shortlist, but for those that remain, we recommend shortlisting two.

  4. Trial your preferred plan - Start by trialling the lowest plan first and considering how the next plan up might work for you.

  5. Engage your team for feedback during the trial - Your team are going to be the daily users of your final choice in plans, so get them involved early in your trial test. How does it work for them? Does it include everything they need?

Working like this will allow you to assess your options much more clearly.

Need some advice? Or help getting Microsoft Teams set up throughout your business?

We understand exactly how busy you are and we also know how important it is that your busy team is productive and efficient. That’s why we can offer you our expert advice on which Microsoft Teams plan will most suit your needs.

We can also install it across all of your business devices, providing training and maintenance throughout the lifecycle of your subscription. We know exactly how to make sure your data is secure and how to make changes for higher efficiencies.

Contact us today and we will meet with you to assess your business needs; selecting and installing the perfect Microsoft Teams set-up.


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