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For many businesses, Microsoft software is part of nearly everything employees do. They use Outlook for email, Teams to communicate, Word and Excel to create documents, and SharePoint and OneDrive to store files.
Having these products work together makes things easier for businesses. But it can also make it harder for businesses to use other software, even if it’s better or costs less.
The U.K.’s Competition and Markets Authority (CMA) is examining that problem. On October 16, the regulator proposed giving Microsoft strategic market status in business software, a designation that could lead to new requirements aimed at increasing competition.
The CMA is particularly interested in whether businesses can choose AI assistants other than Microsoft’s Copilot, use competing security products, and have more flexibility in how they use Microsoft software licenses.
The CMA said more than 1 million public organizations and businesses in the U.K. use Microsoft software, with about 20 million people using it each month.
Technology experts said businesses have other options, but moving away from Microsoft can take more time and cost more money than they might expect.
Why leaving Microsoft is so difficult
Moving away from Microsoft isn’t easy because businesses rely on its products for more than just email, documents, and meetings.
Many companies also depend on Microsoft’s Entra ID for identity management and Intune for managing devices, said Alexander Emil Schröpfer, an independent systems strategist and founder of Algoraksha.ai, a legal tech initiative. They also rely on Microsoft’s access controls and other systems to manage security.
These systems are closely connected, which makes it harder for businesses to replace individual Microsoft products, he told Techopedia.
“Lock-in isn’t a feature you buy. It’s a debt you accumulate, one integration at a time.”
Rodion Sorokin, Co-Founder and CTO, The Capital Index
Rodion Sorokin, co-founder and CTO of The Capital Index, pointed to Microsoft’s identity management system as a major obstacle.
“[It’s] harder than it looks, because Microsoft isn’t really an office suite; it’s the identity layer,” Sorokin said. “Entra ID holds every login, device and permission, and Word and Teams are just the visible part. Replacing Office is a project. Replacing identity is a re-platforming.”
“When you replace one product, you need to make sure all of these integrations continue working.”
Artur Yolchyan, Technology Leader, Aland Cloud
Organizations that stop using Microsoft’s identity management system have to move employee accounts to a new system and change how employees log in to other applications, said Artur Yolchyan, a technology leader at Aland Cloud.
He told Techopedia that companies that have passed ISO 27001 or SOC 2 audits could run into problems meeting those standards if they change their identity management systems. They could also have trouble passing future audits.
“If you work in an industry that requires certain standards to be met, you may run into issues with not having consistent policies applied to all your systems.”
Nasir Khan, President and CEO, X-Centric IT Solutions
Even businesses that stay with Microsoft can run into problems when they change how their systems are set up, Nasir Khan, president and CEO of X-Centric IT Solutions, told Techopedia.
He described a project involving a large global equipment company that had acquired several businesses over six years. As a result, the company was using several separate Microsoft 365 environments.
Khan’s team helped bring those environments together. But even though the company was staying with Microsoft, the changes nearly disrupted some of its business-critical applications. The consolidation ultimately reduced the company’s Microsoft licensing costs by about 60%, Khan said.
The hidden costs of switching
Moving away from Microsoft can cost businesses more than they expect. Companies need to consider more than the cost of moving their files. They also have to rebuild the permissions, links, approvals, templates, and integrations that employees rely on, Rami Zwebti, an AI business consultant with a background in enterprise AI strategy at Accenture, told Techopedia.
For example, he said that simply downloading files from SharePoint doesn’t preserve their permissions, workflow information, or version histories. Companies also have to consider how long it will take employees to adjust to new software.
“Measure the total time spent, output quality, security review, integration effort, and training needs before expanding.”
Gleb Tsipursky, Behavioral Scientist and Author, “The Psychology of AI Adoption at Work”
“When a company organizes its approvals, shared files, meeting notes, and collaboration around one software ecosystem, a switch also means rebuilding habits and workflows,” Gleb Tsipursky, a behavioral scientist and author of “The Psychology of AI Adoption at Work,” told Techopedia. “The apparent savings on licenses can disappear if employees spend hours navigating parallel systems, relearning tasks, or correcting errors.”
“I’d tidy permissions before connecting any assistant, whether it’s Copilot or a competitor.”
Mark Tan, Founder and CEO, Lynqra
Changing employees’ habits can take longer than moving the data, said Mark Tan, founder and CEO of Lynqra, a Singapore consultancy.
He described a project in which his company developed an automated process for uploading financial documents. Although the technology worked, employees continued filing documents the old way.
The project didn’t involve replacing Microsoft, but it shows why businesses need to spend more time helping employees adjust to new software, Tan told Techopedia.
Microsoft licensing can complicate the decision
Microsoft’s licensing structure can also make switching expensive. Sorokin said Microsoft’s licensing bundles can discourage companies from replacing individual products because removing one application from a package doesn’t necessarily reduce the overall cost very much.
Yolchyan also said that purchasing separate products to replace Microsoft’s applications can cost more than buying them together in one subscription.
Contract terms create another obstacle. Zwebti said companies may also have to keep paying for Microsoft products while they switch to other software. They also have to factor in how much they’ll spend on testing, training, and ongoing support.
Tan said companies should plan their move around their contract renewal dates. “Contractually, annual commitments mean the earliest sensible switch date is usually the renewal date, so plan backwards from it,” he said.
Can businesses use competing AI assistants and security tools?
Businesses don’t necessarily have to stop using Microsoft 365 to work with another company’s AI assistant or security software. Zwebti said Microsoft Graph lets outside applications access Microsoft 365 information and services, as long as they have the necessary permissions and approvals.
However, organizations need to make sure those connections work properly. Sorokin argued that Microsoft’s own AI tools have an advantage because they’re already integrated with its software.
“Copilot is built in and sold in the same bundle, while a rival assistant reaches your data through Microsoft’s APIs, with permissions, consent flows and rate limits that Microsoft defines,” he said.
Those connections can involve additional work to manage permissions and approvals, as well as technical limits on how the applications communicate, Sorokin said.
Zwebti recommended testing which documents a competing AI assistant can retrieve, what actions it can perform, and how the company controls access.
Tan also warned that connecting an AI assistant can expose problems with existing file permissions. For example, a folder that someone shared too widely years ago could appear in an AI assistant’s responses if the employee using it already has access to that information.
“I’d tidy permissions before connecting any assistant, whether it’s Copilot or a competitor,” Tan said.
Using multiple security products can also create problems. “The security aspect of having multiple vendors that provide similar services [is that] it can cause issues with policy management,” Khan said. “If you work in an industry that requires certain standards to be met, you may run into issues with not having consistent policies applied to all your systems.”
Does Microsoft’s integration help businesses or limit their choices?
Microsoft’s products can make things easier for businesses, especially smaller companies that don’t have their own IT staff. Tan said having email, files, chat, and employee logins in one system makes it easier for these businesses to manage their technology.
Yolchyan gave some examples of how Microsoft products work together. Employees can easily share Excel files with coworkers, and meetings scheduled through Microsoft Bookings automatically appear in Outlook.
But these connections can also make it harder to switch to other software. “When you replace one product, you need to make sure all of these integrations continue working,” Yolchyan said. “Otherwise, you can end up with missed meetings, broken access, missed deadlines, or additional engineering work.”
Tan said companies may not realize how much they depend on Microsoft until they want to use another product or Microsoft raises its prices. By then, they may find that many of their applications and everyday tasks depend on Microsoft systems, making it difficult to switch.
Sorokin noted that these dependencies often stay buried until a company attempts to leave. “Technically, the dependencies hide in places nobody inventories: Excel macros, Power Automate flows, SharePoint permissions and Teams integrations,” he said. “Lock-in isn’t a feature you buy. It’s a debt you accumulate, one integration at a time.”
How businesses can keep their options open
Technology experts said companies don’t have to replace all their Microsoft products to reduce their dependence on the company.
Tan recommended that companies identify which business processes depend on Microsoft before making any changes.
“Map which workflows rely on which product before buying anything new,” he said. “Keep important data in formats you can export, and know where it lives.”
He also suggested keeping track of which outside applications can access company systems. “Connect outside tools through documented APIs and keep a list of what has access,” Tan said.
Sorokin said companies should use widely supported identity standards, such as SAML and OpenID Connect, so applications aren’t tied to one identity management system. He also advised companies to test that they can export data at least once a year.
Businesses should start by having a small group of employees test competing software before rolling it out to everyone, Tsipursky said.
“Measure the total time spent, output quality, security review, integration effort, and training needs before expanding,” he said.
