If your company uses Microsoft 365, you have probably considered adding Teams Phone instead of a separate VoIP provider. I have deployed both. Here is when each makes sense.
When Teams Phone Wins
You are already all-in on Microsoft. If your team lives in Teams for messaging and video, adding phone capabilities keeps everything in one app. No switching between applications for different communication types.
You have Microsoft E5 licenses. Teams Phone is included with E5 ($57/user/month). If you are already paying for E5, the phone system is effectively free. Adding a standalone VoIP would be an additional cost.
Your IT team has Microsoft expertise. Teams Phone is managed through the Microsoft 365 admin center. If your IT team already manages Exchange, SharePoint, and Teams, adding phone requires minimal new skills.
When Standalone VoIP Wins
You need advanced call routing. Teams Phone handles basic routing well but struggles with complex IVR trees, skills-based routing, and call queue management. If you run a support center or sales floor, standalone VoIP provides deeper call management.
You want lower per-user costs. Teams Phone requires specific licenses: either E5 ($57/user) or E1/E3 plus Teams Phone Standard ($8/user add-on) plus a calling plan ($12-24/user). Total with E3: $44-56/user. A standalone VoIP system runs $19-29/user with all features included.
You are not a Microsoft shop. If your team uses Google Workspace, Slack, or other non-Microsoft tools, Teams Phone adds complexity without integration benefits.
Cost Comparison (50 Users)
| Option | Monthly Cost | What You Get |
|---|---|---|
| Teams Phone (E5) | $2,850 | Phone + full M365 suite |
| Teams Phone (E3 + add-ons) | $2,200-2,800 | Phone + basic M365 |
| Standalone VoIP | $950-1,450 | Phone + video + messaging |
| Standalone VoIP + M365 E3 | $2,750-3,250 | Both, best features of each |
My Recommendation
For Microsoft-heavy organizations with 200+ users and E5 licensing: Teams Phone makes sense. The marginal cost is near zero and consolidation has real value.
For everyone else: a standalone VoIP provider delivers better phone features at lower cost. providers such as VestaCall (https://vestacall.com) with month-to-month contracts integrates with Microsoft Teams for presence and click-to-dial while providing superior call routing, recording, and analytics at half the cost of Teams Phone licenses.
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