Microsoft Launches Teams Phone Features As Zoom Rivalry Continues

Microsoft CEO Satya Nadella gestures while speaking at a Bloomberg event on the opening day of the World Economic Forum in Davos, Switzerland, Jan.21, 2020.

Simon Dawson | Bloomberg | Getty Images

Microsoft said Monday it was adding features to its cloud-based calling service that would make it more competitive with Zoom.

Microsoft is upgrading its Teams Phone service, which is part of the Teams communications app, to include the ability to transfer calls between devices, take calls in vehicles via Apple CarPlay, and transcribe calls. It will also be able to identify unwanted calls, integrate with contact center software, and make calls to five additional countries via calling plans.

Zoom Phone already has all of these features, according to the Zoom website, although the spam service is still in beta. But Microsoft is also improving Teams Phone with a detail that Zoom lacks. In October, Teams Phone will add a virtual walkie talkie, allowing users to press a button to talk.

Microsoft has invested heavily in Teams, especially since the early days of the pandemic, when consumers flocked to Zoom because it was easy to download and use from any device. In March 2020, Microsoft said it would allow users to download custom virtual backgrounds for video calls, a feature that has been available in Zoom for months.

Microsoft CEO Satya Nadella told analysts in July that Teams Phone has nearly 80 million monthly active users. At the TechCrunch Disrupt conference last week, Slack CEO Stewart Butterfield said Microsoft had made its intentions clear.

“Over the past year, maybe even 18 months, I think Microsoft’s concern with killing us has shifted somewhat to a concern with killing Zoom,” Butterfield said. Salesforce completed its acquisition of Slack earlier this year.

Microsoft is also launching Operator Connect, a product it announced in March to allow customers to leverage their existing services with carriers such as NTT and Verizon to place calls. Zoom supports fast connections to existing landline operators.

Telecommunications companies work directly with Microsoft, so customers don’t have to initiate integration projects themselves, said Jared Spataro, vice president of Microsoft.

“I’m starting to see this really take off for us in terms of interest,” Spataro said.

However, Zoom does not stand still. The company is using its stock market gains from the pandemic to strengthen itself beyond cloud-based video and phone calls. In July, Zoom announced plans to acquire call center technology provider Five9 for $ 14.7 billion.

Call center agents can already use Zoom Phone with Five9. Now the same is possible with Teams Phone.

“I think every time you have yours – they’re going to pay a lot of money to acquire their contact center solution – I think of course they’ll try to make that look fantastic,” Spataro said.

To get Microsoft’s Teams Phone service, organizations with 300 or more users must purchase Office 365 E5 or Microsoft 365 E5 premium subscriptions. If they have a cheaper subscription, they can add the new features for a fee.

Microsoft announced last month that it would increase the cost of Office 365 E5 in March. This will mark the first big price adjustment since the company introduced the subscription plan in 2011 as an alternative to traditional licenses.

E5 subscriptions represent 8% of the entire Office 365 commercial installed base, Microsoft chief financial officer Amy Hood told analysts on a conference call in July. The company has more than 300 million paid Office 365 commercial seats.

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