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Microsoft Adds a Cheaper Teams to Take Down Zoom

The software giant has gone the low price route to bring in more small business users.

Microsoft (MSFT) has released Teams Essentials, a standalone version of its popular videoconferencing software. Previously customers could only subscribe to teams as part of a broader suite of Office software.

The new version of teams costs $4 per user, per month which Microsoft called "the most competitively priced online meetings and collaboration solution in the market," in a release.

How Does It Compare to Zoom?

Zoom (ZM), one of the leaders in the videoconferencing space, has a free tier that offers users unlimited one-on-one meetings and the ability to host up to 100 participants for meetings that last no longer than 40 minutes.

The company's next tier, which costs $14.99 per license, per month, allows up to 30 hours of group meetings with up to 100 participants.

Microsoft's Teams Essentials allows for up to 30 hours of meetings per month with group sizes up to 300 people. It also comes with 10GB of cloud storage while Zoom's free offer has none and its $14.99 plan comes with only 1GB.

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The free version of Teams offers 60 minutes per month of group meetings with up to 100 participants and 5GB of cloud storage. It also has a Slack-like chat service which users can use on an unlimited basis.

Can Microsoft Derail Zoom?

Microsoft has made it clear that it is targeting small businesses, a key Zoom customer base, with Teams Essentials.

“We know how difficult the past 20 months have been for small businesses. They’ve had to demonstrate extreme flexibility to adapt, often with limited access to tools and technology,” said Jared Spataro, corporate vice president of modern work at Microsoft. “Teams Essentials is built specifically to meet the unique needs of small businesses, enabling them to thrive in this new era of work.”

Zoom has seen its share price drop by just over 45% year-to-date and it's down more than 50% over the past 52 weeks. TheStreet Real Money Pro Contributor Bruce Kamich made it clear that as of Nov. 24, he was not a fan of buying shares.

"The strategy is simple — avoid the long side of ZM for now. A bottom will take a while to form. Do not be in any rush," he wrote.