This essentially killed my (EU-based) startup in the project management and collaborate space. Before MSFT bundled Teams with O365 we were rapidly growing and closing enterprise customers in the automotive, energy and education industries with high retention rates. Right around the time the Teams bundling started our retention dropped, churn went through the roof, growth slowed down, we failed to raise our next round…
As a product manager myself, it means that the value that people got from your app, was not enough to fight a free product. And I mean free as in if you are already paying for a subscription, and it gets added without aditional cost. I have worked at companies that payed for either Google Workspace or Office 365, and they also payed for Slack.
The problem you have is that the people making the finance decisions are often far-removed from the ones making value-based decisions.
The ones making the decision from a finance-perspective look at the offering from Microsoft, realise that it does video and chat for free (well, they're paying for O365 anyway) and that's it.
They don't care (or know!) that it's a resource hog, buggy etc. The value from the OP's product would not even be a consideration even if it was 100x "better" (use your own definition of "better" here!)
So I think it's unfair to use that comparison in this case