Microsoft Teams at a Crossroads: TCO, AI, and UCaaS Competition

Microsoft Teams’ ascent has been nothing short of meteoric, but recent market research and licensing moves show a product at a crossroads — still dominant in installed base, yet increasingly vulnerable on customer satisfaction, cost, and perceived AI value compared with several aggressive competitors.

Background / Overview​

Microsoft Teams now sits at the center of most enterprise collaboration conversations. For many organizations it provides the three core pillars that define modern UCaaS — messaging, meetings, and PSTN calling — tightly integrated with Microsoft 365 and Azure Active Directory. That tight integration has been Teams’ biggest strategic advantage: single sign‑on, calendaring, identity and compliance integrations, and an ecosystem of plugins and third‑party connectors have made Teams the default collaboration surface for countless organizations.
At the same time, its success has attracted scrutiny: independent research shows that while Teams is often the most widely installed UCaaS, it does not always deliver the highest customer satisfaction or the clearest business outcomes for all organizations. Recent moves by Microsoft to adjust licensing availability and raise certain Teams Phone prices have created fresh inflection points that are prompting CIOs and procurement teams to revisit assumptions about lock‑in, total cost of ownership (TCO), and the competitive landscape.
This feature examines the current state of Teams across market position, customer sentiment, pricing and licensing, AI capabilities, and competitive threats. It also lays out pragmatic guidance for IT leaders considering whether to double down on Teams, demand changes from Microsoft, or evaluate alternative UCaaS providers.

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Where Teams stands today​

Market footprint and enterprise exposure​

• Metrigy’s Workplace Collaboration MetriCast: 2025 study of roughly 800 companies reports that Microsoft is the leading installed UCaaS provider, accounting for about 20.6% of firms surveyed that have deployed UCaaS. Nearly half (about 47.4%) of orgs evaluating a provider listed Microsoft among their options. Those figures underscore two realities: Microsoft’s entrenched position in the installed base, and its continuing presence on shortlists when companies re-evaluate UC providers.
• Put simply: Microsoft owns a sizable slice of the UCaaS pie and remains a default consideration for organizations refreshing their collaboration stack. Because many enterprises rebid or reassess UC vendors on a roughly two‑year cadence, Microsoft’s installed base and presence in evaluation shortlists translate into sustained market momentum — provided Microsoft can convert consideration into satisfaction and measurable business value.

Strengths called out by customers​

Microsoft’s strengths are consistent with the platform’s design and ecosystem:

• Reliability and security — enterprises frequently cite Teams’ uptime, compliance toolsets, and integration with Microsoft 365 governance and security tooling as major pluses.
• Integrations — deep hooks into Exchange Online calendaring, SharePoint, OneDrive, and Azure AD are enormous operational advantages for Microsoft 365 customers.
• Ease of use (for basic scenarios) — for users who primarily message and meet, Teams’ interface and client experience are broadly accepted.
• Regulatory and compliance capabilities — where organizations require records, eDiscovery, retention labels and controls, Microsoft’s compliance suite is often rated strongly.

Those strengths explain why many organizations keep Teams as the center of their collaboration architecture, particularly where Microsoft 365 is the corporate productivity standard.

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The cracks: customer sentiment and business outcomes​

Where Teams is falling short​

While market share and technical integration are strengths, recent research shows meaningful gaps in other customer‑facing metrics:

• In Metrigy’s analysis, Teams scored above average for reliability, integrations, compliance capability, ease of use, and security features. However, it scored below average in technical features, customer support, value, analytics capabilities, AI capabilities, and voice quality.
• Microsoft customers in that study also reported below‑average measurable improvements in revenue impact, operating cost reduction, and employee productivity gains attributable to their UCaaS investment compared with peers on other platforms.

These are not trivial data points. They highlight that being the dominant installed provider does not automatically equate to delivering the strongest measurable business outcomes or highest customer delight. For procurement and IT teams, this matters: UCaaS is both a platform and a toolchain. If the platform does not enable efficiency gains, or if support and voice quality lag, the downstream cost (user frustration, shadow apps, and workarounds) can be high.

Voice quality and technical features​

Voice quality and advanced telephony features are areas where enterprises expect enterprise‑grade performance. Poor experiences here are highly visible and have immediate business costs.

• Voice quality complaints often stem from a combination of network design, session border controller (SBC) choices, carrier interconnects, codec negotiation, and the configuration of Direct Routing versus Microsoft Calling Plans.
• Advanced telephony features — fine‑grained call routing, supervisor monitoring, carrier redundancy, emergency‑calling nuances and complex call flows — are frequently cited as more mature in some longstanding UCaaS players that have narrower focus on telephony features.

Analytics and AI capability gaps​

Analytics and AI are two areas where customers expect differentiated, measurable value.

• Administrators want actionable analytics: user adoption trends, call‑quality diagnostics tied to geography or device, meeting ROI signals, and usage patterns that help right‑size the platform.
• AI capabilities are now a competitive battleground. Many UCaaS competitors have packaged assistant‑style features or real‑time meeting intelligence into their paid plans, often without an extra license. Microsoft’s approach — offering Copilot features but gating more advanced capabilities behind Teams Premium or separate Copilot add‑ons — has left some customers wondering whether they are getting parity between Microsoft’s native AI offering and the inclusive assistant features competitors provide.

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Pricing and licensing changes: a turning point​

What changed and why it matters​

Microsoft has adjusted how Teams is bundled and priced over the past year:

• Regulatory pressure from the European Union prompted Microsoft to make changes to Teams’ bundling with Microsoft 365. After a period where Teams was uncoupled from some Microsoft 365 suites for new customers, Microsoft moved to re‑introduce bundle options (with adjusted price deltas) effective November 1, 2025.
• Microsoft also implemented price increases for Teams Phone and related offerings. For example, the Teams Phone Standard standalone license moved from $8/user/month to $10/user/month for annual billing; frontline worker SKUs and calling plan bundles were also repriced on a staged schedule during 2025.

These changes create concrete pivot points for organizations that were previously comfortable accepting Teams as a “free” part of their Microsoft 365 purchases. When the marginal cost of maintaining Teams rises, procurement teams have a clear incentive to evaluate alternatives — especially if competitors are advertising AI assistants or enhanced features at equal or lower price points.

The business impact is not hypothetical​

A $2 per user per month increase sounds small on paper, but scale magnifies it. Example impact:

• For an organization with 1,000 licensed calling users, a $2/month increase equals $24,000/year.
• For 10,000 users, that increase becomes $240,000/year — significant budgetary line items that can justify a formal RFP.

More importantly, licensing complexity increases procurement friction. Splitting Teams from core Microsoft 365 bundles, differential pricing across regions, and separate Copilot/Teams Premium purchases make forecasting TCO more complex and raises the administrative bar for license management.

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AI and Copilot: parity or premium?​

Microsoft’s Copilot strategy​

Microsoft has taken a monetization approach to Copilot: the company provides varying AI capabilities in different tiers and frequently requires Teams Premium or a dedicated Copilot subscription for advanced meeting summarization, multi‑tenant knowledge integration, or deeper automation. There is a free Copilot Chat capability for cross‑company chat, but more advanced virtual assistant features are paid.
This approach contrasts with many competitors that have folded baseline assistant capabilities into paid UC plans without a separate premium license.

Competitors’ positioning​

Several vendors have positioned themselves around “AI included” in paid tiers, pitching assistants that can:

• Auto‑summarize meetings and produce action items
• Provide real‑time transcription and contextually relevant prompts
• Automate after‑meeting tasks (CRM updates, ticket creation)
• Answer voice or chat queries related to meetings and contacts

However, the landscape is nuanced: the depth of those assistants varies, and what is included for “no additional charge” differs wildly by vendor and plan. Some vendors place advanced features behind higher tiers or limit AI usage quotas. For organizations making a decision based on AI value, careful feature‑level comparison is essential.

Important caution for buyers​

Claims that a competitor “includes AI for free” can be misleading without details. Variables to validate:

• Which AI features are included (real‑time notes vs. post‑meeting summaries vs. enterprise knowledge integration)?
• Are there per‑user or per‑usage quotas?
• Does vendor AI process data in a way that satisfies your regulatory or data residency requirements?
• What training data is used and how is prompt/context retention handled?

Flag these items during vendor evaluation — they materially affect privacy, compliance, and the true operational cost.

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Competitive landscape and who’s winning customer sentiment​

Notable rivals​

• Established UCaaS players such as Cisco Webex, Zoom, RingCentral, Dialpad, Zoho, and GoTo have all entrenched themselves in niches where they emphasize either telephony pedigree, ease of use, or aggressive AI packaging.
• Research shows companies such as Cisco Webex, RingCentral and Zoom have recently received recognition for stronger customer sentiment and business success in certain surveys and award programs. Additional vendors (e.g., GoTo, Verizon Business) are also cited as achieving superior customer sentiment in some studies.

Why competitors can outflank Teams​

Competitors win on one or more of these axes:

• Narrower focus on telephony: vendors built from the ground up on PSTN/voice often deliver more turnkey telephony features and simpler carrier relationships.
• Faster innovation on UC features: smaller or more specialized vendors sometimes iterate on meeting or voice features faster.
• Pricing simplicity or inclusion of AI: bundling assistant capabilities into standard seats can be easier for procurement to justify.
• Customer service and professional services: vendors that invest in SLA‑backed support and expert migration help often score higher on customer sentiment.

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Practical guidance for IT leaders: due diligence checklist​

When Teams pricing or satisfaction issues trigger a re‑evaluation, follow a disciplined approach to vendor selection.

1. Quantify current and projected TCO (number sample calculation)​

• Include license deltas, Calling Plan vs. Direct Routing costs, carrier charges, SBC management, number porting, and E911 compliance.
• Account for administration overhead: add time‑and‑materials for license management, policy enforcement, and training.
• Example: (This is illustrative)
• Current Teams Phone cost: $8 → new rate $10/user/month
• Annual increase per user: $24
• Multiply by licensed users to get annual delta, then compare to migration amortized costs (SBCs, migration services, training, overlap) to calculate three‑year TCO.

2. Map features, not brands​

• Create a weighted feature matrix: PSTN features, call center integrations, E911, device certification, analytics, AI assistant capabilities, compliance/recording, and federation.
• Score each vendor against the matrix using objective test cases (call flows, recording requirements, legal hold, etc..

3. Verify voice quality and network expectations​

• Run proof‑of‑concept calls east/west, remote/home, mobile, and international.
• Measure MOS (mean opinion score) and jitter/packet loss under real user bandwidth profiles.
• Confirm carrier redundancy, SBC failover plans, and local PSTN breakout strategies.

4. Validate AI data handling and privacy​

• Ask vendors for written data flow diagrams: where audio and transcripts are processed, stored, and how long context is retained.
• Validate the vendor’s data‑use policy for AI training: can your data be used to improve vendor models, and if so, under what controls?
• Confirm data residency and encryption standards for transcripts, summaries, and call recordings.

5. Check integration with Microsoft 365​

• If you use Azure AD, Exchange Online, SharePoint, or Teams for calendaring, confirm how the new vendor will integrate or interoperate.
• Evaluate SSO/SCIM provisioning and whether moving users off Teams will break existing Power Platform or 365 automations.

6. Do a staged migration plan​

• Start with pilot groups that represent different user classes (sales, contact center, frontline, remote knowledge workers).
• Keep a rollback path and dual‑run overlap period to validate continuity.

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Migration risks and technical considerations​

Moving away from Teams (or deploying a multi‑vendor strategy) carries technical and operational risk:

• Identity and access management: Azure AD is often the identity backbone. Removing Teams doesn’t remove Azure AD reliance — but federation and SSO policies require careful mapping.
• Data sprawl: Chat history, recordings, and attachments often live in Exchange/SharePoint. Data migration for legal and compliance reasons is non‑trivial.
• Interoperability: Meeting links and calendar invites rely on deep Outlook integration. Replacing Teams with a provider that lacks native Outlook add‑ins or calendar manipulations can increase friction.
• E911 and regulatory compliance: ensure new provider supports the same or better E911 routing and emergency notification features.
• Device certification: many organizations rely on certified desk phones and Teams Rooms devices. Changing providers may require replacing devices or using intermediary gateways.

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What Microsoft should do (and what buyers should demand)​

For Microsoft​

• Address perceived gaps in support, analytics, and voice quality by investing in enhanced operational tooling and clearer carrier/Direct Routing guidance for customers.
• Reconsider packaging and value messaging for Copilot features in UC scenarios: parity in assistant capabilities or clearer migration paths would reduce churn risk.
• Simplify messaging around license deltas and provide clear migration/TCO calculators so customers can evaluate scenarios without engaging professional services for basic modeling.

For enterprise buyers​

• Demand clear service levels and proof points for voice quality and AI feature claims.
• Request trial access to full feature sets (including Copilot/Teams Premium equivalence) so buyers can evaluate AI’s real world effectiveness in your workflows.
• Make procurement decisions based on measurable KPIs, not marketing claims: voice MOS, time‑to‑value for AI tasks, reduction in meeting overhead, and support responsiveness.

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The bottom line​

Microsoft Teams is far from finished — its integration with Microsoft 365 and enterprise identity services gives it a durable strategic advantage. The platform’s reach and installed base make it the default option for many organizations. But recent pricing adjustments, regulatory changes in bundling, and evidence that Teams scores below average in several customer‑facing metrics suggest momentum alone will not guarantee future dominance.

• For organizations where tight Microsoft 365 integration is paramount, Teams will remain logical and defensible.
• For organizations that prioritize telephony sophistication, out‑of‑the‑box AI assistant value without add‑on licensing, or lower per‑user costs, alternative UCaaS providers warrant serious evaluation.
• The decision point is now more concrete: license price increases and Copilot packaging create a financial and functional inflection that justifies a formal RFP or at least a structured proof‑of‑concept evaluation.

Ultimately, IT leaders should approach the UCaaS marketplace with a clear, metric‑driven procurement process: quantify current costs and outcomes, define the exact features you need, pilot the scenarios that matter most to your business, and only then commit to long‑term licensing. The next two years will be decisive in UCaaS: players that combine solid voice performance, usable AI that produces measurable outcomes, and transparent pricing will win the hearts and budgets of enterprises — even when Microsoft is on the shortlist.

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Conclusion
Microsoft Teams’ success is real, but its challenges are also tangible. Market leadership provides opportunity — but not immunity. The combination of customer satisfaction gaps, incremental licensing costs, and a rapidly evolving set of AI features across competitors creates an unprecedented moment for enterprises to revisit UC strategy. For IT leaders, the task is straightforward: measure the value Teams delivers today, stress‑test AI and voice capabilities that matter most for your users, and make a vendor choice that optimizes user experience, compliance, and TCO for the next three to five years.

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Source: No Jitter It’s time for a Microsoft Teams reality check