When should I use a Team vs a Channel vs a Group chat?

When using Microsoft Teams, it can be hard to determine where to create collaboration spaces. We have options to create a whole Team, a singular channel or a group chat. First we need to understand the differences between the three and the use cases for them:

Microsoft Team

A Microsoft Team is a space to collaborate with your inner loop of people. These are people you work with on a daily basis. Teams are typically longer term and when I create a Team it provides:

Channels to organise information and topics
Tabs to customise the space, for example a Tab for Managing Tasks
File collaboration. A Team creates a SharePoint site which stores my files and folders.
A Team email address
Ability to link Team meetings
External users and guest collaboration

Teams are not typically used for short-term/one-off tasks. Some examples of Team use cases are:

Department
Project
Store/club
Office location
All Company

Channel

A Channel is a space within a Team that is used to organise work and topics. If I work as part of the Marketing Team, we are going to be working on more than one thing, so Channels are a great way to separate the files, tasks and conversations but also keep them connected to the same group of people in the Marketing Team.

Some examples of Channels and Teams are:

The best way to determine if you should use a Channel, is if the specific group of people you want to work with/share information with belong to a Team, it makes sense to use that Team and add an additional Channel for your piece of work.

Channels tend to be long-term and any files in the Channel are also stored in the sames SharePoint location as the Team.

Group Chat

In Microsoft Teams you can create Group Chats in a similar style to WhatsApp. In a Group Chat you can communicate with your colleagues via Chat, share and work on files that are stored in OneDrive for Business and even add tabs to customise the Team chat such as tasks, websites, notes and more.

You can even rename your group chats by clicking on the pencil icon:

Group chats are great for short term/one-off tasks. They do not create a SharePoint site for files or a Teams email address. You can add external participants to a group chat but they cannot access files.

Group chats are not designed to remain in your history for very long, and some organisations put retention policies in place to delete chat history after 30 days. The files in the Group Chat (or any chat for that matter) are stored in OneDrive for Business, so you will always have access to those even if the chat history is deleted.

Some Group Chat use cases are: