Microsoft Teams Essentials is a new standalone version for small businesses

Technology

Microsoft is creating its first standalone version of Microsoft Teams for small businesses. Microsoft Teams Essentials will be priced at $4 per user per month and provide access to the core meeting features of Teams without the typical Office app bundling that requires a more expensive Microsoft 365 plan. This standalone version makes Teams even more of a Zoom competitor, as Microsoft is dropping its Slack-like channels functionality in favor of a more simplified chat interface and a focus on meetings and video calls.

“It’s the first standalone offering of Microsoft Teams designed specifically with small businesses in mind,” explains Jared Spataro, head of Microsoft 365. “It brings together features small businesses need to serve customers, including unlimited group video calls for up to 30 hours, group chat, file sharing and calendaring.”

Microsoft Teams Essentials fills the gap for smaller businesses that has existed since Teams launched nearly five years ago. Until now, small businesses have had to choose the Microsoft 365 Business Basic plan — priced at $5 per user per month and increasing to $6 in March — or rivals like Zoom, Slack, Google Workspace, and more.

The differences between Microsoft Teams Essentials and Microsoft 365 Business Basic plans are primarily around Teams functionality and cloud storage. Essentials only offers 10GB of OneDrive storage, compared to the 1TB available on Business Basic. Essentials also lacks meeting recording and transcripts functionality, real-time translation, breakout rooms, and whiteboard integration.

Microsoft Teams Essentials also drops the teams and channels functionality of Teams, so it’s more targeted at businesses that rely on apps like Teams or Zoom for video calling and meetings. Private and group chat will still work in Microsoft Teams Essentials, though.

Microsoft is targeting smaller businesses that have relied on Zoom throughout the pandemic here. Zoom is a competitor that the software maker identified as an “emerging threat” last year, and offering a standalone version of Teams feels like a big step in competing with Zoom and even Google’s Workspace push.

“The pandemic and acceleration of using video calling and virtual tools changed overnight,” explains Nicole Herskowitz, general manager for Microsoft Teams, in an interview with The Verge. “We’re seeing at this point in time a lot of small businesses saying ‘What’s my future model?’ They’re almost doing a broader rethink, and many of them kind of raced to pick up tools very quickly to just stay afloat, and now they’re looking at their long-term strategy to engaging better with customers, with employees.”

Microsoft clearly sees an opportunity to pick up small businesses that are trying to balance a number of tools that don’t always work well together. If you’re part of a small business right now, you might use Zoom for video calls, Slack for group chat, and then Google Workspace for email and calendar. Google has been centralizing its chat and communications apps into Gmail throughout the pandemic and opening Google Workspace up for everyone to use. Slack has app integrations that try to make these separate apps more seamless to use.

Nobody has the perfect solution, and Microsoft Teams Essentials lacks the app extensibility to really bring all these separate small business solutions together. Microsoft is including Google Calendar integration into Teams Essentials soon, though, which is an important step in making Teams truly standalone.

If you’re a small business weighing the cost of Zoom, Google Workspace, Slack, and other tools, Microsoft Teams Essentials could look appealing at just $4 per user per month, especially when a Zoom Pro license is $14.99 per month.

Microsoft Teams Essentials is available today direct from Microsoft or through its regular partners and resellers.