What Is Microsoft Teams and How Does it Work?

A business communication platform that brings together chat, calling, video, and knowledge work

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What-Is-Microsoft-Teams-and-How-Does-it-Work
Unified CommunicationsLatest News

Published: January 31, 2023

UC Today Team

Microsoft Teams is among the premier collaboration apps in the market today. Valued at just $5.16 billion in 2020, collaboration tools will be worth $13.48 billion by 2028 — that’s more than 2X growth in eight years. Two big reasons for this growth are the COVID 19 pandemic and the consequent need for remote collaboration tools. Before 2020, remote work was the exception and not the norm, available in select companies as a workplace perk — only a handful of companies operating on a 100% remote basis. In 2020, companies were forced to move out of physical office spaces while continuing their production workflows.

Tools like Microsoft Teams enable communication and collaboration across workforces in different locations. It allows teams to work flexible hours, connect digitally, and not compromise efficiency or clarity.

What Is Microsoft Teams? Definition

Microsoft Teams is a business communication platform that combines group chat, calling, video conferencing, and knowledge work into a cohesive experience.

Teams are a relatively new entrant in the remote collaboration market. Microsoft launched the app in March 2017, eight years after the release of Slack in 2009. In its early days, Teams mimicked Slack in terms of UX and feature set and grappled with catching up with Slack’s formidable global user base. During the pandemic, Teams caught on and amassed hundreds of millions of users within a brief period. There are several reasons behind this:

  • Teams came as a free add-on in a bundle with Microsoft 365, meaning no cost barriers to adoption.
  • Existing Microsoft users quickly transitioned to Teams, thanks to its familiar UI and integrated ecosystem.
  • Microsoft has invested heavily in Integration partnerships. Teams’ users can gain from an enormous app store that caters to every need.
  • Separate Microsoft Teams experiences were specific to education use cases — a big help for those switching to remote learning for the first time.

As per the last reported numbers, Microsoft Teams had 250 million monthly active users in July 2021, up from 145 million as recently as April 2021.

How Does Microsoft Teams Work?

Microsoft Teams’ core functionalities can be broadly classified into five segments:

Teams chat

Like Slack, Teams works primarily as a group chat application for teams. Employees can send messages, share files, jump into a meeting from a chat conversation, send each other images and emojis, and hold private and group discussions. In Teams, the name of this capability is Channel, where all channel members can interact with each other through asynchronous chat messages.

Audio and video meetings

Microsoft Teams is a cloud-based tool that allows you to conduct online audio and video meetings. Teams meetings have a limit of 30 continuous hours, thousand maximum participants, and up to 2GB PowerPoint files when presenting. There are several ways to launch meetings in Teams – you can convert a chat conversation into a meeting, schedule it via your Teams or Outlook calendar, or share a link to your Teams meeting room.

Calling in Teams

Microsoft Teams has a compelling calling capability, separate from the meeting feature. Calling in Teams is based on a dedicated phone system, where Microsoft provides you with calling plans and phone numbers to mimic a PSTN-like experience on the cloud. Or, you can connect your existing PSTN lines to Teams through the Direct Connect feature. The purpose of Teams calls is to allow employees to conduct routine telephonic conversations without having to switch apps, which is handy for contact centres.

Collaboration capabilities

Teams also improve how you collaborate online, courtesy of its design. It closely integrates with the Office suite, allowing you to share files, co-author, and edit documents in real-time with your colleagues. You can configure Teams to enable collaboration outside your organisation, such as when working with an agency or a regulatory body. Other features like translation, automatic transcriptions, to-do lists, project management, etc., turn Teams into a collaboration hub.

Teams integrations

Finally, integrations are among the top USPs of Teams, setting it apart in a competitive market. Teams integrates with nearly every primary SaaS tool, covering various use cases from HR to marketing, project management to analytics, and customer service to sales. Two types of integrations are available: native, Microsoft-built ones and apps designed by third-party companies. For example, Microsoft recently launched the Approvals app to help Teams users create approval workflows inside the application. This is a native integration, unlike apps such as Salesforce, Workday, etc., which are third-party.

How Much Does Microsoft Teams Cost?

One of the biggest differentiators for Teams has always been pricing.

Microsoft Teams is accessible for home and business, for up to 60-minute-long meetings with up to 100 participants. Teams is available as a standalone app for $4 per user per month or as part of Microsoft 365 Business, starting at $5 per user per month. The free version is highly competent and includes all the collaboration and security features that you could require in a business environment, particularly suited to SMB needs.

The Role of Microsoft Teams in 2022

Teams saw meteoric growth in the last 18 months, and there are no signs of slowing down. According to research by Microsoft, flexible work is here to stay, with more than 70% of employees demanding remote work options. 66% of companies are also seriously considering hybrid work long-term, making tools like Teams indispensable.

Indeed, time spent in Teams meetings increased by 2.5X between February 2020 and 2021, and average meetings are ten minutes longer. Employees working on documents in Teams has also increased by 66% and chat by 45%.

In other words, Microsoft Teams is here to stay, and it will play a significant role in helping to realign our productivity patterns in 2022.

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