Microsoft Teams vs Slack for Business Communication

For a business that already runs on Microsoft 365, Microsoft Teams is usually the better choice for business communication. It comes with the Business plans that include Teams, it shares the identity, security and retention controls you already manage, and it is the only one of the two that turns into a phone system. Slack still wins in a few situations: a company whose bots and integrations already live in Slack, a business that does not run Microsoft 365, a firm whose clients expect Slack Connect, and engineering teams whose work is channel-first. The expensive mistake is running both by accident, with half the company in each.

Why does Microsoft 365 licensing pull most businesses toward Teams?

Licensing gravity is the honest reason Teams wins most of these decisions. Microsoft's Teams comparison page lists Teams inside Microsoft 365 Business Basic, Standard and Premium, with "no Teams" versions of the same suites and a standalone Teams Essentials plan. A company that already pays for Business Standard has Teams in the bundle, wired to the same accounts, conditional access rules and SharePoint storage. Adding Slack means a second per-user subscription, a second identity setup, a second admin console and a second place where company data accumulates.

That does not make Slack the wrong product; it makes it a product that must earn its place. The question we ask clients is what Slack would do that Teams, already paid for, cannot. If the answer is that people like it more, that is a real answer with a price tag attached; if it is Slack Connect with dozens of partner organizations, the price tag may be worth paying. Our Premium vs Standard comparison explains which Microsoft 365 plan makes sense as the base, and our Microsoft 365 management service keeps the tenant tidy either way.

How do Teams and Slack handle working with people outside the company?

Teams offers a few mechanisms, described in Microsoft's external collaboration documentation. External access lets your people find, chat with and call users in other Microsoft 365 organizations. Guest access adds an outside person to a team as a guest account in your Entra ID, where they can chat, meet and work on files under your policies. Shared channels, through B2B direct connect, let people from another Microsoft 365 organization take part in a channel from their own tenant once both sides configure cross-tenant access settings. All of it is governed by Entra ID and Purview, which is the strength; the weakness is that guests must switch organizations in Teams, which outside contacts find awkward.

Slack's answer is Slack Connect, the feature that keeps Slack in the conversation. Slack's pricing page lists one-to-one external messages on the Free plan and group messages and shared channels with outside organizations on the paid plans, so a firm can run a channel per client with the client's staff in it from their own workspace. Slack's help center also describes single-channel and multi-channel guest accounts on paid plans. For a business whose clients are already on Slack, this is smoother than anything Teams offers; for one whose partners are on Microsoft 365, shared channels get most of the way there.

What about calling and meetings?

Meetings are where the two products stop being comparable. Teams is a full meeting product: scheduled meetings from Outlook, recordings and transcripts, and webinar and dial-in options that depend on plan, with Microsoft's comparison page listing 300-participant meetings on the Business plans. Slack's meeting feature is the huddle, an audio or video call started from a channel. Slack's help center describes huddles with screen sharing and up to 50 participants on paid plans, fine for a team call and no substitute for a customer webinar. Most Slack shops run Zoom or Google Meet alongside it, which is another subscription.

Phone calls are the sharper difference. Teams becomes a phone system with the Teams Phone add-on: a business number, an auto attendant, call queues for the front desk and desk phones, with the outside line coming from a Microsoft Calling Plan, an Operator Connect carrier or Direct Routing. Slack does not do this. It integrates with phone providers, but the phone system stays someone else's product. For a business trying to reduce vendors, one tenant for chat, meetings, phones and files is a real saving. Our Teams Phone FAQ covers licensing and carrier choices, and our Teams Phone service handles the porting and rollout.

How do compliance and retention compare?

If a regulator, an insurer or a lawyer can ask for your messages, this section decides it. Teams messages are retained through Microsoft Purview. Microsoft's retention documentation for Teams explains that chats and channel messages are stored for compliance in Exchange mailboxes, that retention policies can retain or delete them on a schedule, and that a message a user deletes in the app stays discoverable while a hold applies. Holds, eDiscovery and Purview DLP extend to Teams the same way they extend to mail. Which tier your plan includes depends on the license: Microsoft's Purview service description lists retention policies for Teams chats and channels and Audit (Standard) under the Business plans, organization-wide retention policies under Business Premium, and a Purview Suite add-on to Business Premium for the premium eDiscovery and audit tiers.

Slack's controls climb with the plan. Slack's pricing page lists a 90-day limit on message history for the Free plan, unlimited history and data retention controls on Pro and above, data exports of all messages on Business+, and the Discovery API, legal holds, HIPAA support and Slack Enterprise Key Management on Enterprise+. In practice a regulated business on Slack needs Enterprise+ for legal holds, with eDiscovery running through a third-party tool connected to the Discovery API. That works, but it is a separate compliance stack from the one covering your email. Our data loss prevention FAQ explains how DLP policies span Teams, mail and files in one tenant.

When does Slack still win?

Slack wins when the company is Slack-native. If your people have run on Slack for years, the bots, integrations and client channels are all there, and moving them to Teams is a project with real cost and no guaranteed improvement. Slack wins when you are not a Microsoft 365 shop; a Google Workspace business gets far less from Teams. Slack wins for engineering teams that live in channels all day and value its app ecosystem, and for businesses whose partners expect Slack Connect. It can also win on plain usability: a tool people enjoy gets used, and a tool people tolerate gets bypassed.

What Slack does not win on is total cost inside a Microsoft 365 company, phone calling, or the compliance story for a regulated business below the Enterprise+ tier. If you do run both, decide what each is for, in writing, and turn off the overlap. Two chat tools with no rule between them is where the compliance gaps and the missed messages live.

Frequently asked questions

Is Microsoft Teams included in Microsoft 365?

Yes, in the versions of the Business plans that include it. Microsoft's Teams comparison page lists Teams inside Microsoft 365 Business Basic, Standard and Premium, alongside "no Teams" versions of the same plans, and a standalone Teams Essentials plan with meetings and cloud storage but without the desktop Office apps. Teams Phone is an add-on on every plan, so budget for it separately if you want calling.

Can Slack replace a business phone system?

No. Slack's huddles are audio and video calls between Slack users, with screen sharing and, on paid plans, up to 50 participants according to Slack's help center. They do not give you a business number, an auto attendant or call queues, and outside callers cannot dial into them. A business that wants its phone system inside its chat tool needs Teams with the Teams Phone add-on, or Slack alongside a separate cloud phone provider.

Does Slack meet compliance requirements for a regulated business?

It can, on the right plan. Slack's pricing page places data retention controls and native DLP on the paid plans, data exports on Business+, and the Discovery API, legal holds, HIPAA support and Enterprise Key Management on Enterprise+, with eDiscovery running through third-party tools connected to that API. Teams covers the same needs through Microsoft Purview, in the portal that already governs your mail and files. Confirm what your specific plan includes before assuming either tool covers you.

Can we use Teams and Slack together?

You can, and many companies do it by accident. There is no native bridge that keeps channels in sync, so running both means agreeing what each is for: Slack for external client channels and Teams for internal work and calling, for example. Write that rule down, apply retention and DLP to both, and revisit it once a year. If the split has no reason behind it, consolidating on the tool that comes with Microsoft 365 is usually the cheaper and safer answer.

Our Microsoft 365 management service runs the Teams side of this: tenant setup, external access and guest policies, retention and DLP, and day-to-day administration, on a month-to-month agreement with a dedicated account manager you can call directly. For phones in the same tool, our Microsoft Teams Phone service handles licensing, number porting and rollout. Talk to us before you renew either subscription and we will map which tool earns its place.