Microsoft Teams, Microsoft’s Phone System

Microsoft Teams Telephony

Microsoft Office – Collaboration

Microsoft Teams has emerged from Microsoft’s long pedigree of Office Software. Microsoft has been the go-to source for business software since a ‘Microsoft Office’ bundle was first launched in 1988 comprising Word, Excel and PowerPoint. Since then, the product line up has grown and become more tightly integrated, with common user interfaces, icons, buttons and features such as spellchecker running across the entire suite.

Microsoft’s first foray into collaboration was Office Communicator that joined the stable in 2007. This provided businesses with a unified communications (UC) client that offered a range of communication options, including instant messaging (IM), voice, and video. In addition, it offered presence and some enterprise voice capabilities, enabling users to place computer-to-computer calls. It did have the ability to make external VOIP calls but there were reliability and quality issues.

In 2010, Microsoft Introduced Lync as a next generation UC client. The platform was more stable but required heavy investment in server technology making the business case, hard to justify. With the Introduction of Microsoft Office 365, Lync was renamed Skype for Business with a much more stable interface providing good voice, video and screen sharing as well as the ability to communicate with the outside world. The Microsoft Office 365 platform delivered the service, removing the need for expensive servers. Skype for Business could also be tightly integrated with the Mitel telephony platform to act as a softphone client.

Emergence of  Microsoft Teams

Teams is a relatively ‘new kid on the block’. In 2016, it was reported that Microsoft were considering offering $8bn for a competitor product, Slack. Instead, Microsoft launched Teams, its platform for collaboration. Unlike Skype for Business, Teams lets you create workspaces, share files, collaborate on documents as well as the UC features of Skype for Business such as IM, video and chat.

Teams was bundled into Microsoft Office 365, specifically the enterprise versions of Office; E1 and E3. The product was initially targeted at large enterprises and it was run as a closed platform so people from outside could not participate. This made it unlikely that freelancers and SMEs would take up the product. Since its initial emergence, this external collaboration has been added, significantly increasing its broad market appeal.

With a greater range of features and functionality it became clear that Microsoft Teams was going to be the UC ‘top-dog’ and, in September 2017, Microsoft Announced that Skype for Business was to be phased out and replaced with Teams.

“Skype for Business Online will be retired on July 31, 2021, at which point it will no longer be accessible or supported. We encourage Skype for Business Online customers to start using Teams and begin planning their upgrades now to allow ample time to complete upgrade prior to the retirement date.

We recognize that customers are using Skype for Business Server and many need to continue to use Skype for Business Server for some users or geographies due to their requirements. In these instances, we encourage organizations to adopt Teams along with Skype for Business Server to drive teamwork and collaboration. The latest version of Skype for Business Server 2019 was released in October 2018 with initial mainstream support planned through January 9, 2024.”

Source: Microsoft (

Microsoft Teams is now part of all Microsoft Office 365 Small Business, Enterprise and Education editions and comes in versions for;

  • Windows and MacOS: Included with Office 365
  • iOS: Microsoft app in App Store
  • Android: Microsoft app in Google Play
  • Web: Teams web client, supported on common desktop web browsers

There is also a free version that has a slightly limited feature set.

Microsoft Teams – Creating Digital Workspaces

Microsoft has built into Teams all the Office 365 applications and services that people use every day including; Word, Excel, PowerPoint, OneNote, SharePoint. There is also support for open, public teams. There are scheduling capabilities, integrating free/busy calendar availability for team members, adding recurrences, and making it easy to transition from chat to high-quality voice and video. In addition to the standard Microsoft applications you can add Microsoft apps such as Planner or OneNote to a team’s workspace along with many third-party apps.

Teams are made up of channels, which are the conversations between team members. Each channel is dedicated to a specific topic, department, or project. Within the channel, the team can share files and collaborate using the built-in applications.

Microsoft Teams Telephony

At the end of 2018, Microsoft introduced, the gamechanger for Teams, Phone System. There had been various false starts with Office Communicator, Lync and Skype for Business but with Phone System you can create a real, credible replacement to a traditional Private Branch Exchange (PBX).

Phone System is the Microsoft technology that provides call control and PBX capabilities with Microsoft Teams (Phone systems is initially available with Skype for Business, but this will phase out with the product).

With Phone System, you can use Microsoft Teams to place and receive calls, transfer calls, and mute or unmute calls. Phone System users can use simple click-to-call through their address book and Microsoft Teams makes the call. Calls can be made or received with a real, physical IP desk phone, your mobile phone, a headset or a softphone on your PC or laptop – for incoming calls, for example, both your desk phone and your mobile can be made to ring, and you answer whichever one you want.

Microsoft Phone System also has a number of core service features;

  • Auto attendant – this can be used to allow incoming callers to navigate their way through a menu to reach the correct department or individual.
  • Call queues – you can create multiple call queues with voice greetings and music on-hold. Calls can be held while the system searches for the next available agent.
  • Voicemail – each user has a Cloud mailbox.

Just like traditional PBXs, calls within your organisation are routed internally never going out to the Public Switched Telephone Network (PSTN). This means that all internal calls, irrespective of location, are free if routed across your data infrastructure.

External Calls

With Microsoft Teams Telephony, there are two ways in which you connect to Microsoft Teams ‘PBX’ to the outside world.

Calling Plan

Microsoft has infrastructure in its US datacentres that can connect Microsoft Teams to the PSTN and Phone System users can connect via this infrastructure by buying a ‘Calling Plan’ from Microsoft.

There are some commercial weaknesses for organisations in the Calling Plan administration and billing. First, you need to port all your phone numbers to Microsoft, effectively ceding control. Next, you need to buy a Calling Plan for each individual user; the Calling Plan is for a bundled specific number of minutes (national or international). Bundled minutes cannot be shared, bills must be paid monthly by credit card and, any call outside the Calling Plan are expensive.

Direct Routing

The second way to connect to the PSTN is using Direct Routing. Direct Routing is connection to the PSTN without going via the Microsoft Core infrastructure and requires additional equipment and software.

The key technology required is a Session Border Controller (SBC). Calls made through Teams Telephony are routed to and from the SBC.

Microsoft Teams - Direct Routing

Outgoing calls from a Microsoft Teams Telephony user are sent from the Microsoft Office 365 Cloud to the SBC and are then routed to the PSTN via SIP trunks. Incoming calls follow the reverse path via a DDI range back to the Teams Telephony user.

Some larger, enterprise customers may have the in-house expertise and budget to configure their own Direct Routing solution but more normally, customers would seek a technology partner to deliver this solution.

Once the calls have been routed to the PSTN, you can arrange a simple standard billing arrangement with per second/minute billing paid in the usual way.


Once Direct Routing has been established, depending on the specific SBC being used, you can integrate Microsoft Teams Telephony with third-party telephony equipment or PBX.

If you partner with the right technology partner, you could integrate Microsoft Teams with, for example, a Mitel phone system. Users would be able to make and receive calls via their Mitel phone or their Teams app on a mobile phone. Specialist services such as Contact Centre, Call Logging or Voice Recording would be manged through the Mitel system, but calls could be seamlessly transferred and managed through Teams.


Microsoft Teams offers a powerful collaboration tool to share and work on projects and to communicate through IM, video, audio or screen sharing. The addition of Microsoft Phone System provided a powerful credible replacement for a traditional PBX. For Micro businesses, a Calling Plan can provide connectivity, effectively but larger organisations should consider Direct Routing with a technology partner to give flexible call billing and interoperability with traditional and legacy systems.

For more information visit: Microsoft Teams TelephonyMicrosoft Teams CollaborationMicrosoft Teams Devices