Microsoft Offers Businesses a Free Version of Teams, Its Slack Rival

Attendees walk past signage in the exhibition hall during the Microsoft Inspire partner conference at the Verizon Center in Washington, D.C., U.S. Photographer: Andrew Harrer/Bloomberg

Microsoft Corp. will offer businesses a free version of its Teams corporate chat app, taking on Slack Technologies Inc. in the startup’s main market.

The new version is available for groups of up to 300 people and gives users unlimited messages and search, as well as 10 gigabytes of data storage, plus 2 gigabytes more for each team member, Microsoft said. Users also get free access to online versions of Office apps to let them create and edit files, slides and spreadsheets. 

Microsoft introduced Teams 16 months ago as an add-on for paying Office 365 cloud customers. Slack pioneered a free app that gets users to try before aiming to upgrade them to a paid version. Slack is also trying to appeal to larger companies. Microsoft wants to lure users who don’t want to pay, at least initially, particularly small firms. 

"We're kind of flipping the model on its head,” said Lori Wright, general manager for Microsoft’s Office 365 collaboration apps. “The competition looks at this as a way to get into enterprises and larger business, but that's a place we've been successful for a long time. To us, this is really about expanding the opportunity down to small and medium-sized businesses who haven't necessarily been Office 365 customers.”

Microsoft previously offered a free version of Teams to educational users. The company said in March that 200,000 organizations use Teams. Slack says it has 500,000 organizations and 8 million active daily users. More than 70,000 customers pay to use Slack, according to the startup. 

Users of the free version of Teams can also upgrade to paid Office 365 plans, which gets them more storage and access to more of Microsoft’s cloud-based Office apps, and Microsoft is hoping at least some of them do. The company announced the new product ahead of its annual conference for partners, which begins July 15 in Las Vegas. 

Microsoft will also preview a new set of worker analytics tools that look at things like an employee’s calendar and email to provide personalized insights to staff – the company considers it sort of a fitness tracker for work. It comes with a set of “nudges” for Outlook email. For example, if a worker schedules a lot of meetings in a short period, they may get a prompt asking if they want to re-schedule some of that time to plan without interruptions. When workers send a lot of emails to a co-worker after normal hours, the system may suggest they either clarify the urgency of the messages or wait until the next day.