Microsoft Licensing for Small Businesses

The other week, I was looking into using Teams as a phone system for a potential small business customer - and spotted a major problem. But it's not a technical one, it's a licensing (or commercial) one: if you're licensed with one of the Small Business Plans (for less than 300 users), you cannot add a Phone System licence.

To be able to add a Phone System licence, you need to have at least an 'E3' licence, which really surprised me.

I spent a little while trying to tabulate the relevant features of a number of different licence plans, and produced this table to help try to compare and understand the options.

Some points:

• I've not listed every single product and feature, just what I thought the ones which would be most relevant to a small business customer.
• I've translated the 'features' into actual 'products' to make it easier for techies to understand.
• All pricing is standard, with no discounts applied, as of July 2019 in GBP, and I've shown it as Annual (no-one I've ever met does their budgets monthly, that's just a ploy by all suppliers to make their pricing look smaller!).

The naming is pretty confusing. I mean, how do the names 'Office 365' and 'Microsoft 365' explain how those products are different? I suspect most people would think they're the same.

For most small business, the most important product would be 'Office 365 Business Premium', which gives you the right to use Word, Excel and so on, on your PC (or Mac) and mobile devices, together with email and Teams hosting. But, you cannot add 'Phone System' to this licence so that you can use Teams as a phone system. Interestingly, you can add Audio Conferencing (so you can create Teams meetings which your customers can dial into on a phone) for £3 per user per month, which actually seems very good value.

The trouble is, if you have a 25-user company which is licensed for Office 365 Business Premium, and they want to look at using Teams as a phone system, their annual licensing cost would leap from £2,800 a year to £5,200 a year to go to E3, even before adding the Phone System and Calling Plan licences. But you can get 25-users from RingCentral for a mere £2,400 a year (based on their Entry Level pricing). OK, so it's not integrated in the same way that it would be with Teams, but it's still a pretty good solution.

So for now, it doesn't look as though Microsoft are interested in serving the small business customers with their telephony solutions, which I think is a pity, as Calling Plan is an attractive option from a technical standpoint if you're in one of the ten countries served. I have heard rumours that this might change, so watch this space!