Zoom and Salesforce stand to benefit from Microsoft’s unbundling of Teams and Office

Published

1 year ago

April 2, 2024

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Microsoft’s rivals won a reprieve on Monday, when the software giant said it would split up its Teams and Office bundles following scrutiny from European regulators.

Zoom, whose video chat app took off during the Covid pandemic, has struggled of late to compete with Microsoft’s suite of communications products. Slack, now owned by Salesforce, has long pined for this type of split, submitting an antitrust complaint to the European Commission in 2020 over what it viewed as illegal tying of Teams into Office.

With Microsoft’s latest announcement, some customers will have to pay more money to get the same features. For example, new clients of Office 365 E3 will pay $3 more per person per month with the split than they would for the combined offering, according to a blog post and previous price lists.

Analysts at Mizuho Securities wrote in a note on Monday that “while customers believe Zoom is a superior platform vs. Teams” and other vendors, “the bundling of MS Teams to Office 365 has always been enticing for customers to consider Teams.”

Zoom’s revenue growth, which peaked at over 350% in 2020 and 2021, slowed to 2.6% in the latest quarter and has been in single digits for seven straight periods.

“In our view, the unbundling of MS Teams should help alleviate some enterprise churn headwinds,” wrote the Mizuho analysts, who recommend buying Zoom shares.

Organizations that already pay for the Microsoft bundle can keep using Teams and Office as is or, “if they wish to switch to the new lineup, they can do so on their contract anniversary or renewal,” the blog post said.

Last year, Microsoft generated almost $53 billion in revenue from Office, including Teams, up about 14% from 2022. CEO Satya Nadella told analysts on the company’s earnings call in October that Teams had over 320 million monthly active users.

Salesforce, which competes with Microsoft in a number of areas including communications and collaborations tools, acquired Slack in 2021 for $27 billion, its most expensive purchase since the company’s founding 25 years ago.

In July 2020, months before Salesforce announced the agreement, Slack filed a complaint about Microsoft in Europe.

“Microsoft is reverting to past behavior,” David Schellhase, Slack’s general counsel at the time, was quoted as saying in a press release, referring to the “browser wars” of the 1990s. “They created a weak, copycat product and tied it to their dominant Office product, force installing it and blocking its removal.”

The year prior, Slack wasn’t expressing much concerns about Teams. Slack founder and former CEO Stewart Butterfield said on an earnings call in December 2019 that while most of the company’s top customers used parts of Microsoft’s Office 365 suite, they were choosing slack for messaging instead of the Teams app.

Zoom’s stock slipped about 1% on Monday and Salesforce shares rose 0.4% A Zoom representative didn’t respond to a request for comment, while Salesforce declined to comment.

The Financial Times reported last year, citing unnamed individuals, that Microsoft would eventually let companies choose to buy productivity software subscriptions with or without Teams to head off a competition investigation from the European Union. Months later, the European Commission disclosed a probe into Microsoft’s Teams and Office bundling.

In response, Microsoft started selling distinct subscriptions for Teams and for other productivity software in 31 European countries.

“To ensure clarity for our customers, we are extending the steps we took last year to unbundle Teams from M365 and O365 in the European Economic Area and Switzerland to customers globally,” a Microsoft spokesperson told CNBC in an email. “Doing so also addresses feedback from the European Commission by providing multinational companies more flexibility when they want to standardize their purchasing across geographies.”

WATCH: How Microsoft has been dodging regulatory trouble amid broader big tech headwinds

Technology

Meta shares hit all-time high as Mark Zuckerberg goes on AI hiring blitz

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5 hours ago

June 30, 2025

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Meta shares hit all-time high as Mark Zuckerberg goes on AI hiring blitz

Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event on Wednesday, Sept. 25, 2024.

Bloomberg | Bloomberg | Getty Images

Meta shares hit a record high on Monday, underscoring investor interest in the company’s new AI superintelligence group.

The company’s shares reached $747.90 during midday trading, topping Meta’s previous stock market record in February when it began laying off the 5% of its workforce that it deemed “low performers.”

Meta joins Microsoft and Nvidia among tech megacaps that have reached new highs of late, all closing at records Monday. Apple, Amazon, Alphabet and Tesla remain below their all-time highs reached late last year or early this year.

Meta CEO Mark Zuckerberg has been on an AI hiring blitz amid fierce competition with rivals such as OpenAI and Google parent Alphabet. Earlier in June, Meta said it would hire Scale AI CEO Alexandr Wang and some of his colleagues as part of a $14.3 billion investment into the executive’s data labeling and annotation startup.

The social media company also hired Nat Friedman and his business partner, Daniel Gross, the chief of Safe Superintelligence, an AI startup with a valuation of $32 billion, CNBC reported on June 19. Meta’s attempts to buy Safe Superintelligence were rebuffed by the startup’s founder and AI expert Ilya Sutskever, the report noted.

Wang and Friedman are the leaders of Meta’s new Superintelligence Labs, tasked with overseeing the company’s artificial intelligence foundation models, projects and research, a person familiar with the matter told CNBC. The term superintelligence refers to technology that exceeds human capability.

Bloomberg News first reported about the new superintelligence unit.

Meta has also snatched AI researchers from OpenAI. Sam Altman, OpenAI’s CEO, said during a podcast that Meta was offering signing bonuses as high as $100 million.

Andrew Bosworth, Meta’s technology chief, spoke about the social media company’s AI hiring spree during a June 20 interview with CNBC’s “Closing Bell Overtime,” saying that the talent market is “really incredible and kind of unprecedented in my 20-year career as a technology executive.”

WATCH: Meta’s AI talent spending spree

Technology

Joby Aviation stock pops 12% after delivering first flying taxi to UAE

Published

5 hours ago

June 30, 2025

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Joby Aviation stock pops 12% after delivering first flying taxi to UAE

An electric air taxi by Joby Aviation flies near the Downtown Manhattan Heliport in Manhattan, New York City, U.S., November 12, 2023.

Roselle Chen | Reuters

Joby Aviation stock soared about 12% as the flying air taxi maker got closer to launching a service in the United Arab Emirates.

The electric vertical takeoff and landing, or eVTOL, company said Monday that it delivered its first aircraft to the UAE and has completed piloted flight tests as it readies for a 2026 launch in the region.

“Our flights and operational footprint in Dubai are a monumental step toward weaving air taxi services into the fabric of daily life worldwide,” said founder and CEO JoeBen Bevirt in a release. He called the Middle East nation a “launchpad for a global revolution in how we move.”

Joby’s planned launch in the UAE was announced in February 2024 as part of an agreement with Dubai’s Road and Transport Authority. The deal included exclusive rights to conduct air taxi service in Dubai for six years.

Oracle stock jumps after $30 billion annual cloud deal revealed in filing

Published

9 hours ago

June 30, 2025

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Oracle stock jumps after billion annual cloud deal revealed in filing

Oracle CEO Safra Catz speaks at the FII PRIORITY Summit in Miami Beach, Florida, on Feb. 20, 2025.

Joe Raedle | Getty Images

Oracle shares jumped more than 5% after a recent filing showed a cloud deal that would add over $30 billion annually.

CEO Safra Catz is slated to share the deal news at a company meeting Monday, according to a filing with the Securities and Exchange Commission. The revenues are expected to start hitting in the 2028 fiscal year.

“Oracle is off to a strong start in FY26,” Catz is expected to say, according to the filing. “Our MultiCloud database revenue continues to grow at over 100%, and we signed multiple large cloud services agreements including one that is expected to contribute more than $30 billion in annual revenue starting in FY28.”

The deals revealed Monday by Catz will not affect the company’s 2026 guidance, according to the filing.