For many IT leaders, the contact center is one of the last major pieces of “traditional” infrastructure still in place.

While collaboration platforms have largely moved to Microsoft Teams, customer interactions often remain on traditional systems or legacy cloud platforms. These environments are stable and well understood but they also tend to sit separately from the rest of the Microsoft ecosystem.

This is where much of the current conversation around Microsoft CX comes from. There is a clear sense that contact centers need to evolve but less clarity on what that actually looks like in practice.

The misunderstanding around Teams and contact centers

A common assumption is that Teams “can’t do contact center.” That’s not entirely accurate but it’s also not entirely wrong.

Out of the box, Teams was never designed to be a full enterprise contact center. However, it does provide a number of building blocks that can create what we at Aura call an informal contact center that provides:

• Enterprise voice (via Teams Phone)
• Call routing (auto attendants, queues)
• Integration with identity, security, and compliance
• A familiar interface already adopted by users

For smaller environments or early stages of CX modernisation, these capabilities can already go further than many expect.

Teams is not meant to replace a contact center on its own, but it’s also not just a collaboration tool with no CX relevance. Instead, Teams acts as a foundation layer, something you can build on. Depending on what you add on top, it can evolve from basic call handling into a much more structured and capable customer engagement environment.

A shift from “platform” to “ecosystem”

Traditional contact centers were typically delivered as separate, tightly integrated platforms. Microsoft is taking a different approach. Instead of a single solution, it is building a CX ecosystem centred around Azure Communication Services (ACS), with Microsoft Teams as the user interface.

ACS provides the core communication capabilities (voice, chat, messaging) and the underlying infrastructure that everything else builds on. This includes Microsoft components such as Teams for collaboration, Operator Connect for voice, and Dynamics 365 for CRM and contact center capabilities. It also includes Microsoft-native partner solutions designed to work directly within the ecosystem, such as Luware Nimbus.

Rather than being a user-facing contact center itself, ACS acts as the communication backbone that allows these different applications to deliver customer interactions in a consistent and integrated way. In practice, this means Microsoft CX is not a single product, but a set of connected capabilities. Solutions like Teams, Luware, or Dynamics all plug into ACS to deliver contact center functionality within the Microsoft environment. The result is that customer interactions can take place inside familiar tools, while still being powered by enterprise-grade communication services and centrally managed data within Azure.

What options do organizations have today?

For companies looking to move to a Microsoft-based CX approach, the practical question is: what does this look like when you actually implement it?

In reality, there isn’t just one answer. The right approach depends on what you need today and how far you want to go.

Informal Contact Center

At the most basic level, organizations can use Microsoft Teams to support structured customer interactions. Features such as call queues, auto attendants, and basic routing are already available within existing Teams licensing, allowing businesses to handle inbound communication without introducing a separate contact center platform.

On its own, this provides the foundation, but adding a layer of visibility is what makes it operationally useful. Solutions like Aura Insights enhance Teams with reporting and analytics that give IT and operations teams a clearer, real-time view of performance, usage, and customer interactions. This helps move from simple call handling to a measurable customer engagement solution, without significantly increasing complexity.

While this setup is not a full contact center in the traditional sense, it can be sufficient for smaller teams, internal service desks, or even larger organizations looking to test a move away from legacy platforms. It creates a low-risk entry point into customer experience modernization using what is already in place, while introducing just enough structure to support customer-facing scenarios.

Full Microsoft-native Contact Center

As requirements grow around compliance, analytics, and more advanced routing, Teams alone is usually not enough. This is where native contact center solutions such as Luware Nimbus, combined with capabilities like call recording (e.g. Oak) and managed services, come into play. These extend Teams into a more enterprise-grade contact center while remaining fully embedded within the Microsoft environment.

At this level, organizations can introduce:

• Advanced routing and queue management
• Call recording and compliance
• Deeper analytics and reporting
• Integration with CRM systems (without being tied to Dynamics)
• Workflow automation through tools like Power Automate
• AI-assisted features such as copilots and real-time insights

Because these solutions are built on Microsoft’s underlying architecture, they remain native to the ecosystem. This means identity, security, and data all stay within the customer’s environment.

For organizations coming from platforms like Avaya, this often feels like a natural evolution: the capabilities of a traditional contact center, but without the same level of fragmentation between systems. It also opens the door to a more integrated operating model, where voice, collaboration, data, automation, and AI are no longer separate layers, but part of a connected environment.

It is also worth noting that despite the name, Dynamics 365 Contact Center does not require Dynamics CRM to be deployed. It can operate as a standalone contact center solution, giving organizations flexibility in how they adopt it within their existing environment.

Dynamics 365 Contact Center

A more recent addition to Microsoft’s CX portfolio is Dynamics 365 Contact Center. This is Microsoft’s fully integrated, native solution, built around Dynamics CRM to extend customer engagement directly to agents.

It is an AI-powered, all-in-one platform designed to manage customer interactions across multiple channels, from self-service to agent-assisted support, all within a single environment.

At a high level, it brings together:

• Voice and digital channels
• CRM and case management
• Native AI capabilities (including copilots and automation)
• Direct integration with Microsoft Teams and Azure

It is particularly relevant for organizations already using Dynamics CRM (or not using a CRM at all), as it allows customer data, interactions, and workflows to sit within one platform, without the need for additional integration layers.

However, it may require a larger-scale transformation compared to partner-led approaches. As a fully integrated solution, Dynamics 365 Contact Center is more tightly coupled to the Dynamics ecosystem, which can impact how systems, processes, and teams are structured. It is typically best suited to organizations looking to consolidate CX and CRM into a single platform, rather than those seeking a more incremental evolution.

The role of AI in Microsoft CX

AI is becoming a core part of how customer experience is delivered across the Microsoft ecosystem. Because everything sits within Azure, capabilities like transcription, copilots, automation, and analytics are built in, rather than add-ons.

In practice, this means agents can benefit from tools like Microsoft Copilot, which provide real-time assistance, suggested responses, and automatic call summaries. AI can be used to analyze conversations to surface trends, customer sentiment, and provide real-time performance insights without manual effort.

With native contact center solutions such as Luware and Dynamics 365 Contact Center, organizations can take advantage of Microsoft’s native AI capabilities, including Copilot and Azure AI. What makes this approach particularly relevant is that AI is not operating as a separate layer or external service, but as part of the same environment where communication, identity, and data already sit. This allows organizations to apply AI to customer interactions while maintaining control over data, security, and compliance within their own Microsoft tenant.

This is especially important for organizations in regulated industries or those handling sensitive customer data, where the ability to use AI without moving data outside of their existing environment can be a key requirement.

Aura’s approach to Microsoft CX

At Aura, the starting point is not “Which contact center should you choose?” but rather: what do you need today and how do you want to evolve from there?

One of the key advantages of Microsoft’s CX model is that it allows organizations to move gradually. Most companies already have (or are moving to) Microsoft Teams. Aura can help you build your CX journey with the capabilities you need today, and progressively expand into more advanced automation, AI-assisted experiences, and intelligent insights such as real-time agent support, smarter routing, and end-to-end visibility, helping organizations modernize their contact center without unnecessary disruption.

Over time, AI can also support more advanced scenarios, such as intelligent routing, automated workflows, and self-service options. The key point is that these capabilities can be introduced gradually to improve efficiency and visibility, without requiring a complete redesign of the contact center.

And because everything sits within the Microsoft ecosystem, this approach also helps reduce complexity. Instead of adding another standalone platform, organizations can consolidate and evolve within a single environment, supported by ongoing expertise and managed services.

Final thought

Microsoft isn’t replacing the contact center in the traditional sense, it’s reshaping how CX is built.

For IT leaders used to clearly defined platforms, that can feel unclear at first. But the flexibility is intentional: different organizations can take different paths, depending on where they are today.

The challenge is less about choosing a single solution, and more about understanding how the pieces fit together and how to evolve without unnecessary disruption.