Slack vs Teams: which is better value for a small team?

Part of our guide on stepwise hybrid team plan

The differences at a glance

Slack and Microsoft Teams differ primarily in pricing structures and included features, which impact small teams’ budgets differently depending on team size and existing software use.

Slack offers a straightforward per-user monthly cost with free and paid tiers; Teams is bundled with Microsoft 365, combining collaboration tools with Office apps, which affects overall expense and value.

Slack’s pricing structure is straightforward, but this simplicity can mask hidden costs for very active teams. For instance, if your team frequently requires advanced integrations or added security features, the jump from the free to the Pro or Business+ tiers can be significant. Pro plans start at $7.75 per user per month when billed annually, which might exceed small budgets if the number of users grows unexpectedly.

Microsoft Teams’ bundling offers a clear advantage for teams already invested in the Microsoft ecosystem. The integration with Microsoft 365 means you also get access to cloud storage via OneDrive and collaboration on files in real-time, which Slack does not provide natively. However, if your team does not use Office apps regularly, this added value may not justify the higher cost, making Slack a more flexible option. Before you commit to anything, it is worth looking at dealing with open office noise.

Slack vs Teams pricing differences

Slack charges a monthly fee based on active users, with free, Pro, and Business+ tiers. The free tier limits your message history to 90 days, which can be a serious productivity bottleneck for teams that need long-term info access.

Teams pricing is tied to Microsoft 365 subscriptions, which bundle collaboration tools with Office apps like Word and Excel. The free Teams tier offers unlimited chat history but fewer features than paid plans, which begin when you add a Microsoft 365 license.

For small teams using Microsoft Office already, Teams often feels like a cost-effective step up because you’re paying for software you also need, rather than just a chat app. There is more on monday vs clickup in a separate guide.

Slack’s Pro plan includes unlimited message history, unlimited integrations, and group video calls for up to 15 participants, priced at $7.75 per user per month (billed annually). The Business+ tier, at $15 per user per month, adds enhanced security and compliance features, which may be essential for regulated industries but can strain budgets.

Microsoft Teams’ paid plans come with Microsoft 365 Business Basic at $6 per user per month and Business Standard at $12.50 per user per month. Business Standard unlocks desktop Office apps alongside Teams features, which can offset costs if users need full Office functionality. The free Teams tier includes unlimited chat and search but limits meeting duration to 60 minutes, which might be restrictive for some small teams.

For example, a 10-person team on Slack’s Pro plan pays $77.50 monthly, while the same team on Teams Business Basic pays $60. Teams’ lower entry price with bundled Office apps may offer better value depending on user needs.

How pricing scales with team size

Slack’s per-user pricing makes it affordable for very small teams but quickly expensive as headcount grows. For example, a 10-person team pays roughly two-thirds less than a 30-person team monthly.

Teams costs scale with Microsoft 365 licenses, so each team member needs a subscription to unlock full features. But the fixed cost per license includes added value of Office apps, which may reduce overall software spending.

Slack’s simplicity works best for teams under 15; Teams starts to shine around 20 users because of the integration with Microsoft 365 and included apps that would otherwise cost extra.

Slack’s simplicity in pricing means each additional user adds a predictable cost, but the total can escalate quickly. For example, a 15-person team paying $7.75 per user on the Pro plan spends $116.25 monthly, but a 30-person team on the same plan doubles that to $232.50, which may strain small business budgets.

In contrast, Teams’ pricing with Microsoft 365 licenses provides a more modular approach. Teams’ cost-effectiveness increases when the additional services like email hosting with Exchange or SharePoint storage are considered. Larger teams can also benefit from volume licensing discounts offered by Microsoft, which are not available with Slack.

Teams’ scalability shines when combined with other Microsoft services. For a 25-person team, if licenses are negotiated at $5.50 per user (a volume discount example), the monthly cost drops to $137.50, making the platform more affordable as team size grows. Slack lacks such volume discounts, which can make it comparatively costlier at scale.

Cost impact on small business budgets

Small businesses with tight monthly budgets benefit from Slack’s free plan at very small sizes, but the 90-day message limit can cause loss of critical info, nudging them toward paid tiers.

Teams’ integration with Microsoft 365 means businesses already paying for Office apps may see little extra cost for Teams, maximizing software spend efficiency and reducing app clutter.

Slack’s paid plans allow many third-party integrations, which can add costs or require management overhead. Teams includes many collaboration features in one place, which may reduce the need for add-ons and lower total cost.

Slack’s free plan can be a cost-saver initially, but the 90-day message history limit can lead to important conversations being lost, forcing some small businesses to upgrade sooner than expected. This unplanned upgrade can disrupt budgeting, especially if the team grows quickly.

Microsoft Teams’ integration with Microsoft 365 means that many small businesses already have the necessary licenses, so the incremental cost of Teams is minimal. This bundling reduces the risk of paying for redundant tools, helping keep IT budgets lean.

Slack’s reliance on third-party integrations can also lead to additional costs. Many popular integrations require separate subscriptions or come with usage limits, which small businesses might overlook. Teams includes many native features that reduce or eliminate the need for extra apps, streamlining costs and management.

Feature sets tied to price tiers

Slack’s free tier limits message retention, integrations, and video call participants. Paid tiers unlock unlimited message history, screen sharing, and up to 15 apps integration per workspace.

Teams’ free tier offers unlimited message history and video conferencing, but file storage and advanced collaboration features require Microsoft 365 subscriptions.

Teams bundles Office apps like Word, Excel, and PowerPoint, which are unavailable in Slack but often required by small businesses, adding practical value to Teams at paid tiers.

Slack’s paid tiers allow up to 15 app integrations per workspace, but heavy app usage or reliance on custom bots can complicate administration and increase costs for add-ons or development time.

Teams offers broad native integration with SharePoint, OneDrive, and Outlook, meaning file sharing, calendar scheduling, and email are seamlessly connected without extra fees. This can improve productivity and reduce reliance on third-party apps.

Another consideration is video conferencing capacity. Slack caps group calls at 15 participants even on paid tiers, while Teams supports meetings up to 300 participants under paid plans. Small teams planning frequent larger meetings may find Teams’ limits more accommodating, potentially avoiding additional webinar or conferencing tool expenses.

Slack vs Teams pricing differences for your small team

Slack is generally better for very small teams (under 15) with a tight monthly budget and no existing Microsoft 365 investment, due to a straightforward free tier and inexpensive entry-level paid plans.

Microsoft Teams fits best if your small business has 20 or more employees, uses or plans to use Microsoft 365, or needs richer built-in Office app integration and video conferencing without extra apps.

Choosing the wrong app can mean overspending or inadequate features. Consider your current software stack, team size, and message history needs before deciding.

• Slack suits teams under 15 who want a simple chat app with affordable upgrades.
• Teams works best for 20-50 users already paying for Microsoft 365 licenses.
• Slack’s free plan’s 90-day message limit can hinder business continuity.
• Teams includes Office apps and larger video meetings in the base price.

Questions people still ask

I’ve helped multiple small businesses cut communication costs by matching team size and software needs precisely.