On August 29, 2007, Microsoft purchased Parlano and its persistent group chat product, MindAlign. On March 4, 2016, Microsoft had considered bidding $8 billion for Slack, but Bill Gates was against the purchase, stating that the firm should instead focus on improving Skype for Business. Lu Qi, EVP of Applications and Services, was leading the push to purchase Slack. After the departure of Lu later that year, Microsoft announced Teams to the public as a direct competitor to Slack at an event in New York on November 2, 2016, and was launched worldwide on March 14, 2017. It is currently led by Microsoft corporate vice president Brian MacDonald.
In May 2017, Microsoft announced Teams would replace Microsoft Classroom in Office 365 Education. On July 12, 2018, Microsoft announced a free version of Teams, offering most of the platform's communication options for no charge, but limiting the number of users and team file storage capacity. In January 2019, Microsoft released an update targeting "Firstline Workers" in order to improve the interoperability of Teams between different computers for retail workers.
In September 2019, Microsoft announced that Skype for Business would be phased out in favor of Teams. Hosted Skype for Business Online was discontinued on July 31, 2021.
In December 2019, Microsoft released a public preview of Microsoft Teams for Linux, which it discontinued in 2022. In July 2020, Microsoft shut down its video game livestreaming service Mixer, and announced that its developers would be working some of its technology into Teams.
Microsoft Teams has integrations through Microsoft AppSource, its integration marketplace. In 2020, Microsoft partnered with KUDO, a cloud-based solution with language interpretation, to allow integrated language meeting controls. In June 2022, an update was released using AI to improve call audio through the elimination of background feedback loops and canceling non-vocal audio.
It announced a "Walkie Talkie" feature in early 2020 that uses push-to-talk on smartphones and tablets over Wi-Fi or cellular data, for employees who speak with customers or run day-to-day operations. On March 19, 2020, Microsoft announced Teams had hit 44 million daily users, mostly due to the COVID-19 pandemic. On a single day in April, it logged 4.1 billion meeting minutes.
Teams allows users to communicate in two-way persistent chats with one or multiple participants. Participants can message using text, emojis, stickers and gifs, as well as sharing links and files. In August 2022, the chat feature was updated for "chat with yourself"; allowing for the organization of files, notes, comments, images, and videos within a private chat tab.
In July 2023, the EU Commission opened an anti-trust investigation into the possibility that Microsoft unfairly used its office suite market power to increase sales of Teams and hurt its competitors. The next month, Microsoft announced it would make Teams an optional part of the Microsoft 365 bundle, and provide more information to software developers to allow Teams users to transition to competing software with their Teams data. In early 2023, Microsoft updated Teams to open links from chats in Microsoft Edge instead of the default browser set by the user.