On November 1, 2025, Microsoft executed a sweeping overhaul of its productiveness suite licensing following years of EU antitrust strain. The transfer was hailed as a win for competitors. Slack, which filed the unique grievance, celebrated the result: not solely might enterprises now purchase Microsoft 365 with out Groups hooked up, however Microsoft was additionally required to enhance how rival communication instruments combine with its software program ecosystem. For firms locked into Microsoft 365 however preferring Slack or Zoom, this was speculated to be liberation.
For many enterprises, nonetheless, the truth has been far much less triumphant. The $8.55-per-user month-to-month saving from dropping Groups could also be offset by added administrative complexity, misplaced ecosystem synergy, and the premium value of third-party options, making such a transfer redundant. In the meantime, Microsoft’s dismantling of conventional quantity reductions and its push towards AI-driven “Copilot” bundles has left enterprises dealing with further expense.
The story of Groups unbundling, though framed as one in all newfound selection, has changed one difficulty with one other. Understanding why requires what really modified in November 2025 and what it now prices to handle.
What Really Modified in November 2025
The roots of the November 2025 restructure stretch again to July 2020, when Slack filed a proper antitrust grievance with the European Fee. The allegation was easy: by bundling Groups into Workplace 365 and Microsoft 365 at no further seen value, Microsoft was leveraging its dominant place in productiveness software program to crush competitors within the collaboration market. The Fee’s investigation discovered advantage within the declare. To keep away from fines of as much as 10% of world turnover—roughly $24.5 billion—Microsoft proposed a collection of commitments in Might 2025, formally accepted in September.
The commitments, many legally enforceable for seven years, required Microsoft to supply variations of its suites with out Groups at a diminished value, enable present prospects to change away from bundled packages throughout renewal, and enhance technical interoperability for opponents. Whereas the Fee’s focus was the European Financial Space, Microsoft opted for a worldwide rollout to keep up operational consistency and maybe preempt related regulatory actions elsewhere.
Microsoft reintroduced the flexibility for purchasers worldwide to buy Microsoft 365 and Workplace 365 Enterprise suites with Groups included, rolling again the worldwide unbundling that had been in place since April 2024. Nevertheless, the “no Groups” variations remained as everlasting, lower-priced options. This created a dual-track licensing actuality: organizations should now explicitly select between an built-in ecosystem and a modular strategy.
Probably the most crucial mechanism is the “value delta,” the mounted distinction in value between a collection with Groups and one with out it. Within the Enterprise tier (E3 and E5), Microsoft established a minimal delta of $8.55 per consumer monthly. This delta shouldn’t be merely a pricing selection however a regulatory requirement designed to make sure that the Groups part has a clear and separable financial worth. Microsoft Groups Enterprise is obtainable as a standalone product for precisely $8.55 per consumer monthly, reaching what the corporate calls “financial neutrality”: a corporation that chooses an unbundled suite and later provides Groups individually pays the identical whole quantity as one which licenses the bundled suite from the outset.
On paper, this seems to be like selection. In apply, it has launched administrative and monetary complexity that few organizations have been ready for and that many now discover dearer than the bundle ever was.
Does Unbundling Enhance Whole Spend?
The promise of unbundling was easy: organizations might save $8.55 per consumer monthly by dropping Groups and selecting a best-of-breed various. For a ten,000-user enterprise, that theoretically interprets to $85,500 in month-to-month financial savings. However the monetary actuality is way extra complicated.
Simon Gammon, Cloud Providers Director at Nexus, explains: “From what we’re seeing throughout the organizations we help, Microsoft’s resolution to unbundle Groups from sure enterprise licenses has not diminished value for many prospects. In lots of instances, it’s elevated whole value of possession whereas introducing new layers of procurement and licensing complexity.”
The difficulty is twofold. First, the $8.55 saving is shortly consumed by the price of a third-party collaboration instrument. Slack’s Professional plan prices $7.25 per consumer monthly, which seems barely cheaper, but it surely lacks the deep integration and superior options many enterprises require. Upgrading to Slack’s Enterprise+ plan, which incorporates SSO, superior AI recaps, and enhanced safety, prices $15.00 per consumer monthly. For a ten,000-user group, that’s $150,000 monthly.
Second, unbundling has uncovered redundancy and compliance gaps. Tyler Higgins, Managing Director at AArete, notes: “Unbundling has uncovered widespread redundancy and compliance gaps, with organizations carrying overlapping licenses or paying for customers who not require full collaboration entry. In apply, this creates a state of affairs the place unbundling shifts value visibility, not value burden.”
Probably the most vital long-term monetary impression stems from dismantling the normal Enterprise Settlement low cost construction. Though in a roundabout way associated to Groups unbundling, its timing meant the prices have been seen collectively.
Efficient November 1, 2025, Microsoft started eradicating tiered reductions for all On-line Providers. Organizations whose renewals fall after this date are being transitioned to a flat, list-rate pricing mannequin. For a big enterprise that traditionally benefited from a Degree D low cost (usually 15,000+ seats), the removing of this low cost represents a considerable enhance in IT expenditure. Some estimates counsel that organizations renewing in 2026 will see baseline will increase of 12% to fifteen%.
Tomás O’Leary, Founder and CEO of Origina, questions whether or not Groups unbundling was a helpful excuse to usher within the change: “The priority we’re listening to from enterprises is when unbundling is used to repackage present performance in a approach that drives larger whole value of possession, provides procurement complexity, or pressures prospects to keep up the established order at the next value, it stops being pro-choice and begins feeling coercive. Many organizations are actually being requested to pay extra merely to face nonetheless or to make selections on a vendor’s timeline reasonably than their very own.”
For many enterprises, the mixture of unbundling complexity, misplaced quantity reductions, and the excessive value of third-party options has resulted in a web enhance in spending.
A Aggressive Opening That Hasn’t Materialized?
Unbundling was speculated to open the market to opponents similar to Slack, Zoom, and Webex. However market share information from 2025 and early 2026 tells a special story. By late 2025, Microsoft Groups held over 40% of the worldwide collaboration platform market, with as much as 320 million each day lively customers. Slack’s market share remained round 13% in the identical section.
Patrick Watson, Director of Analysis at Cavell, explains why: “Microsoft’s transfer merely got here too late. By the point Groups was separated from the broader Microsoft 365 suite, it had already reached greater than 300 million customers and develop into deeply embedded throughout core productiveness functions. Our analysis with greater than 400 Groups decision-makers within the UK and US reveals this clearly. Eighty-six % bought Groups as a part of a 365 bundle, and 84% mentioned they’d have purchased Groups even when it had been a standalone service. In different phrases, unbundling has had very restricted market impression.”
Competitors between Groups and Slack has advanced right into a segmented rivalry based mostly on firm dimension and business reasonably than a broad market battle. Groups stays the default selection for 90% of Fortune 500 firms that worth its deep integration with Microsoft 365 governance and safety features. Slack, conversely, dominates organizations with below 500 staff, holding a 52% market share in that section.
Higgins presents a measured view: “Unbundling ought to create a gap for opponents, however the profit is extra selective than many anticipate. Platforms like Slack might achieve traction in focused environments, significantly if procurement groups are already working sourcing occasions tied to broader software program rationalization efforts. Even then, wholesale displacement stays unlikely for many giant organizations. Groups is deeply built-in into operational procedures.”
What Did the Groups Unbundling Actually Obtain for the UCaaS Market?
The November 2025 Groups unbundling was designed to revive aggressive stability to the unified communications market. On paper, it succeeded: enterprises now have the express proper to buy Microsoft 365 with out Groups, and rival platforms have secured commitments for improved interoperability. However the hole between regulatory intent and market actuality stays broad.
For many enterprises, unbundling has not translated into significant selection. The $8.55-per-user saving is absorbed by administrative overhead, compliance dangers, and the premium value of integrating third-party platforms. The simultaneous removing of volume-based Enterprise Settlement reductions has compounded the monetary burden, leaving organizations dealing with baseline value will increase of 12% to fifteen%—far outweighing any theoretical profit from modular licensing.
Opponents have gained technical entry however not market traction. Groups’ dominance within the enterprise section stays largely unchallenged, with 90% of Fortune 500 firms persevering with to depend on it as their major collaboration platform. Slack and Zoom have carved out strongholds in particular segments, however wholesale displacement has not materialized. For a lot of, the unbundling arrived years too late to forestall the ecosystem lock-in that now defines the UCaaS panorama.
Maybe probably the most vital consequence is one regulators didn’t anticipate: the shift from product bundling to data- and AI-driven lock-in. As Microsoft layers Copilot and different AI providers onto its productiveness suite, the worth proposition is not about whether or not Groups is “free.” It’s about whether or not a corporation’s complete information property is optimized for Microsoft’s intelligence layer. On this context, unbundling a single utility appears like a hindrance, not a freedom to choose the best-of-breed.
The unbundling might have happy the letter of antitrust regulation, but it surely has but completed little to shift the stability of energy within the UCaaS market. If something, it has strengthened the gravitational pull of the Microsoft ecosystem, proving that dominance constructed on integration is way tougher to dismantle than dominance constructed on value.
