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How to reduce costs in Microsoft Teams

How To Reduce Costs In Microsoft Teams 

Whether you work in IT, procurement, or finance, you’ll be aware that Microsoft Teams can rack up quite a bill. 

That’s not necessarily a negative. It’s what happens with telecoms and collaboration technology. The more users you have, the higher the bill. The more you use a specific vendor, the higher that specific bill is. 

Instead of figuring out how to reduce costs in Microsoft Teams, what we’ve done for the last few years is accept that our monthly costs are spiralling out of control. 

And done nothing. 

During the pandemic, the notion of turning anything off or reducing subscriptions was a big no. Everybody needed to work from home. They needed access to files, each other, and an experience that replicated what they had in the office.  

Now, we’re faced with high interest rates, a cost-of-living crisis, and the pressure to reduce costs in Microsoft Teams. 

Where to start? 

Do we throw out all our handsets and go softphone only? Is it a good idea to move everyone to the free license and see what happens?  

There must be a middle ground, right?  

The good news is yes there is. It involves trimming your processes, ensuring everyone is using the right licenses and calling plans, and automating provisioning in Microsoft Teams

Is Microsoft Teams expensive? 

Value and cost are different things. We must remember this when asking the question, is Microsoft Teams expensive? 

If you’re paying for Microsoft Teams Premium but not using any of the premium-only features, then yes, Microsoft Teams is expensive for you

But if you’re using Teams for meetings, chat, phone calls, meeting rooms, webinars, etc., then you’re likely getting good value from its core components.  

There are caveats here, like whether everyone has the right license, if you’re using the right method for PSTN calling, and how long it takes for you to provision users and make changes. 

In some cases, it’s not the products you consume but the processes that surround a product that makes a product seem expensive. 

Why do I have to pay for Microsoft Teams? 

Microsoft Teams has different license and package types designed to suit different business types and sizes. 

There is a version of Microsoft Teams that is free. This is aimed at small businesses and includes the following functionality: 

  • Data encryption for meetings, chats, calls, and files  
  • Unlimited group meetings for up to 60 minutes 
  • Unlimited chat with coworkers and customers 
  • Up to 100 participants per meeting 
  • 5 GB of cloud storage per user 
  • File sharing, tasks, and polling 
You might move to Microsoft Teams free to reduce costs in Microsoft Teams

You can immediately reduce costs in Microsoft Teams if all you need is this feature set.  

If you need more than this basic functionality or larger or longer meetings, you must pay for Microsoft Teams.  

The simple answer here is that it is a business tool, provided by another business (Microsoft). Though it has the capacity to offer a free version, Teams must be a profitable business unit for Microsoft. 

But if you’re finding that Teams feels expensive, there are several ways you can save money. 

How can I save money when using Microsoft Teams? 

We break down how you can save money when using Microsoft Teams into three core areas: 

  1. Trim your processes 
  1. Ensure everyone is using the right licenses and calling plans 
  1. Automate Microsoft Teams provisioning 

1 – Trim your processes 

If you were to hire a business consultant to help you reduce costs in Microsoft Teams, they would focus on three things: people, processes, and technology. 

The first (people) is obvious. If you’ve got lots of users, you’re going to have a higher Teams bill than businesses with fewer users. If you reduce the number of people, you reduce the size of the bill. 

But that’s unlikely to be conducive to productivity and business. So, we must focus on processes and technology. 


The nature of collaboration tools is that people develop their own habits and routines. Some of these are productive. Others feel productive but slow down other people.  

For example, @ mentioning the entire channel, when simply sending the message would suffice. 

You don't need to @ mention everyone

Sure, there are reasons why @ mentioning is a good idea. In broadcast channels or for important company updates, when everyone must see the message urgently, you’d @ message everyone. 

For less urgent notices and messages, posting in the channel that everyone is in will suffice. 

We created a Microsoft Teams onboarding checklist you can use to ensure everyone knows how your business specifically uses Teams. After all, people might join from other businesses that developed bad habits that lead to poor processes and lack of efficiency.  

It might be that you got caught up in encouraging everyone back to the office, at least when they have meetings scheduled. While there may have been best intentions, you’re left with expensive meeting room equipment either unused or being used due to mandating that’s where meetings happen. 

Commit to making in-person meetings virtual when they don’t need to be in-person. Again, these “rules” will differ from business to business.  

There are plenty of businesses that remain (or already were) remote-only, ticking over millions and billions of dollars a year. Just because the old way was people sat around a board room table, it doesn’t mean it must be the new way.  

That might take some adapting and getting used to for different generations and people set in their ways. But, if you want to reduce costs in Microsoft Teams, there must be some give. 

Typical types of meetings include: 

  • Information sharing 
  • Decision making 
  • Problem solving 
  • Team building 
  • Brainstorming 
  • Welcomes 
  • Demos 

Think about other technologies (almost all available in Teams) you could be using to facilitate these types of meetings.  

Switching to asynchronous meetings, using channels and chats more effectively, and enabling self-service will go a long way to reducing the number of in-person meetings burdening the cost of Teams. 


When you reduce the number of in-person meetings, you can reduce the number of meeting rooms, office space, and meeting room equipment. 

You might even reduce the number of offices you need. Downsizing real estate used to be viewed as a size of failure. Today, the awareness that it could be a sign of technology adoption is commonplace. 

“Running a London office is probably one of your biggest costs, second only to staff.” 

Ian Kitchener, Founding Partner at Find A London Office. 

It’s also important to think about the smaller items attached to your Teams environment. While it may seem obvious that removing $500 conference phones will reduce your costs in Teams, the scale of smaller equipment tallies to a similar cost. 

By switching to just using the Teams client, for instance, you can remove the need for IP handsets if users already have headsets. Even a basic handset, costing $50, contributes to large Teams-associated costs. 

If you have 1,000 employees, with 500 still using a handset, that’s $25,000. You have two choices here (and with most equipment-associated costs): 

  1. Change everyone’s processes now and sell the equipment 
  1. Communicate that phones are being phased out and don’t refresh next year  

Your next step is to audit the equipment in use and weigh up the cost vs value. When you’ve made a decision, put in place the processes to make those changes. 

Aside from hardware, licenses and calling plans add to rising costs. Let’s see how auditing what your users need vs use can help reduce costs in Microsoft Teams. 

2 – Ensure everyone is using the right licenses and calling plans 

Audit your license usage 

Microsoft doesn’t make licensing particularly easy. Some packages include access to the wider Microsoft 365 ecosystem. Here, businesses typically go all-in on Microsoft, using SharePoint as a document hub, Teams for meetings and collaboration, and apps like Lists, OneNote, and Power Automate. 

Other businesses thrive using the Essentials pricing tier, which gives you standalone access to Teams without the extra Microsoft apps. 

Consider all the Microsoft Teams license options to potentially reduce costs in Microsoft Teams

Finding the right mixture of who needs what, especially at the higher end, means auditing your users’ usage of Teams to see who needs what. 

For example, only a select few users might host webinars. Even fewer will need the reporting tools of said webinars. 

Run an annual audit (which might be by way of a survey or automated software) to work out which licenses can be downgraded so you can reduce costs in Microsoft Teams. 

Select the right calling option 

With Microsoft Teams, you have three options for calling: 

  1. Microsoft Calling Plans 
  1. Direct Routing 
  1. Operator Connect 

Traditionally, buying from a retailer (Microsoft in this case) is the more expensive option. But Microsoft Calling Plans serve a purpose. 

If you need to quickly enable a Teams user with external calling, adding on a per user basis is simple. There’s no configuration other than turning it on in the Teams Admin Center. 

When you roll out external calling at scale, opting for Direct Routing or Operator Connect becomes a more viable option.  

Here, you can enable external calling outside of Microsoft’s supported destinations, use cross-connects to ensure call quality, and make ongoing changes through the lifecycle of your Teams deployment. 

Integration with external apps and feature parity with your existing phone setup are other reasons commonly cited for choosing Direct Routing or Operator Connect.  

Making sure you have the right calling option, at the right time, can lead to countless cost savings on calls alone. 

Read more: Callroute: A viable alternative to Microsoft Operator Connect 

If you already use a third party for calling, you can use Callroute’s self-service platform to connect any carrier, in any country to Microsoft Teams. 

You can make routing decisions on a per number basis, enable automatic failover, and house all your numbers and carriers in a single place for all your telephony admin. 

On average, Callroute customers save 40% on calling costs when moving to our self-service portal. 

And that’s before they dig into our automated Microsoft Teams provisioning tool

3 – Automate Microsoft Teams provisioning 

One of the costliest, yet unseen, elements of Teams is the time spent provisioning and remedying provisioning errors. 

You can sort out your licenses, calling plans, and unneeded hardware, but it’s all for nothing if you still lose $1,000s when it comes to enabling Teams users. 

Take the scenario where a new employee starts your company. A ticket comes into requesting new user setup. 

The average provisioning ticket includes a mixture of scripts and manual interventions.   

The biggest loss of time is collecting the necessary settings and data to input into the various configuration steps.   

For example, what Teams policies to assign, what number do they need, and which teams do they need access to?  

All manual activities that don’t often get included on the ticket (because HR doesn’t know). 

These costs assume everything goes as planned.  

So, what happens to the cost of provisioning Teams users when we factor in manual error?  

The costs of human error when provisioning Teams users  

With any manual process, there is a risk of human error. The larger the size of the organization, the higher the error percentage will be.   

With size comes complexity, and it can be hard for humans to ensure quality.  

Error does not mean a script failed to run. Error means that the intended result is not the actual result and causes a user to have a poor experience.  

There are many reasons for error. The most common are:  

  1. Inaccurate source data that has been entered incorrectly.  
  1. Data mistakes in input data preparation for scripts and tasks.  
  1. Sub-standard quality through poor training, negligence, tiredness, or tedium.  

The worst part here is that the process will have appeared to complete successfully. The result will not be known until the user logs in for the first time.  

When noticed, the error will be logged as a support ticket and will need to be triaged and resolved manually. This process takes longer as there is extra investigation time and may require more skilled workers to rectify the issue.   

The average IT support ticket to resolve a configuration error is approximately $45.  

Cost of error (IT Cost – no escalation)  
Item  Resource  Number  Hours  Cost  
Service desk ticket logged  Office Worker  1.00   0.10   $1.53  
Ticket triaged & assigned  1st Line Engineer  1.00   0.20   $2.97  
Ticket actioned by engineer  2nd Line Engineer  1.00   1.50   $29.01  
Ticket management  1st Line Engineer  1.00   0.75   $11.06  
      Ticket Cost  $44.57  

This can almost double in cases where escalation is needed to fix the most complicated errors.  

Cost of error (IT Cost – with escalation)  
Item  Resource  Number  Hours  Cost  
Service desk ticket logged  Office Worker  1.00   0.10   $1.53  
Ticket triaged & assigned  1st Line Engineer  1.00   0.20   $2.97  
Ticket actioned by engineer  2nd Line Engineer  1.00   1.50   $40.10  
Escalation engineer  Specialist Engineer  1.00   1.00   $19.35   
Ticket management  1st Line Engineer  1.00   1.00   $14.88  
      Ticket Cost   $78.83  

The cost to IT is only one element. When error is introduced, the impact is felt right across the organization. These are often the hidden costs that we pay little attention to.  

And this is dangerous. 

Without automation, the cost of provisioning and the cost of error, is likely the biggest unnecessary expense when it comes to Teams. 

Conclusion: how to reduce costs in Microsoft Teams 

To extract the most value, or simply to reduce costs, in Microsoft Teams, there are key areas to focus on: 

  1. Trim your processes: factor in how people use Teams and the technology associated with it. 
  1. Ensure everyone is using the right licenses and calling plans: conduct an annual audit. 
  1. Automate Microsoft Teams provisioning: check out Callroute today

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