Microsoft 365 vs Microsoft Teams
Microsoft 365 and Microsoft Teams are both team communication tools. Microsoft 365 is aimed at small businesses and enterprise, while Microsoft Teams is aimed at enterprise and small businesses. Microsoft 365 costs less, from $1.99/mo versus $4/mo for Microsoft Teams. Both have a free plan.
Word, Excel, Outlook, Teams and OneDrive in one subscription
Microsoft's chat, meetings and calling hub inside Microsoft 365
| Pricing | Freemium · $2 | Freemium · $4 |
| Starting price | $1.99/mo | $4/mo |
| Free plan | Yes | Yes |
| Free trial | 30 days | 30 days |
| Built for | Small businesses, Enterprise, Freelancers | Enterprise, Small businesses |
| Platforms | web, windows, macos, ios, android | web, macos, windows, ios, android |
| Country | US · 2011 | US · 2017 |
| Rating | — | — |
Choose Microsoft 365 if
Businesses and households that depend on Word, Excel and Outlook and want email, storage, security and AI under one Microsoft account.
- Industry-standard file formats and the most capable spreadsheet in Excel
- Desktop apps remain more powerful than any browser-based rival
- Business Premium bundles security and device management at a fair price
Look elsewhere if: Browser-first teams that prefer lightweight docs and chat (Google Workspace, Notion or Slack fit better).
Choose Microsoft Teams if
Organisations already standardised on Microsoft 365 that want chat, meetings and files in one governed platform.
- Included in most Microsoft 365 business plans at no extra cost
- Deep integration with Outlook, SharePoint, OneDrive and Office
- Strong security, compliance and identity management via Entra ID
Look elsewhere if: Startups and developer teams that prefer fast chat and a large third-party app ecosystem, or Google Workspace users (Slack, Google Meet).
Microsoft 365 vs Microsoft Teams pricing
Microsoft 365
- Microsoft 365 Basic$1.99/mo100 GB OneDrive and ad-free Outlook; no desktop apps or AI
- Personal$9.99/mo$99.99/year; 1 person, 1 TB, desktop apps with Copilot
- Family$12.99/mo$129.99/year; up to 6 people, 2 TB shared, Copilot for owner
- Premium$19.99/mo$199.99/year; Family plus extensive Copilot usage
- Business Basic$7/user/moAnnual commitment; web and mobile apps, Teams, 1 TB, email
Microsoft Teams
- Teams (free)$0Personal use; 60-minute group calls, up to 100 people
- Teams Essentials$4/user/moAnnual commitment; standalone meetings and chat
- M365 Business Basic$7/user/moAnnual commitment; Teams plus web Office, email, 1 TB
- M365 Business Standard$14/user/moAnnual commitment; adds desktop Office apps, webinars
- M365 Business Premium$22/user/moAnnual commitment; adds Intune and advanced security
Microsoft 365 · Key features
- Desktop, web and mobile versions of Word, Excel, PowerPoint and Outlook
- Copilot in Word, Excel, PowerPoint and Outlook on paid home plans
- OneDrive cloud storage from 100 GB up to 2 TB on home plans
- Teams chat, meetings and webinars on Business plans
- Exchange business email with custom domains and 50 GB mailboxes
- SharePoint intranet sites and document libraries for teams
Cons
- Plan and add-on licensing is confusing for small buyers
- July 2026 increase raised Business Basic and Standard prices
- Copilot usage limits and features vary by plan and region
Microsoft Teams · Key features
- Persistent channels, group chats and threaded conversations
- Video meetings with recording, transcription and live captions
- Webinars and town halls for large internal and external audiences
- Microsoft 365 Copilot recaps, chat summaries and drafting
- Real-time co-editing of Word, Excel and PowerPoint files in chats
- Teams Phone add-on for cloud PBX calling
Cons
- Heavier and slower than Slack for fast chat
- File and permission model follows SharePoint and can confuse users
- Best features such as Copilot and Premium cost extra
Microsoft 365 vs Microsoft Teams: FAQ
Which is cheaper, Microsoft 365 or Microsoft Teams?
Microsoft 365 starts at $1.99/mo and Microsoft Teams at $4/mo. Both prices are checked on the vendors' own pricing pages.
Do Microsoft 365 and Microsoft Teams have a free plan?
Yes, both Microsoft 365 and Microsoft Teams have a free plan; paid plans add more usage and features.