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Microsoft has recently announced a change in how customers purchase and manage their licenses through their Cloud Solution Provider (CSP) Program. This CSP plan is being replaced by a new program called the “New Commerce Experience."
From the beginning of the launch in 2015 of the Microsoft CSP plan, many products have evolved. Over the last few years, Microsoft has been targeting the reduction of licensing costs and complexity.
In addition, Microsoft aims to provide flexibility to support a range of client purchasing scenarios. To achieve this, Microsoft launched the New Commerce Experience (NCE) for Microsoft Azure in 2019 – and in fall of 2021 expanded NCE to include Microsoft 365, Dynamics 365, Windows 365, and Power Platform for commercial seat-based offers.
Learn more about Microsoft 365: The ultimate guide to Microsoft Office 365 licensing.
The goal of introducing NCE is to enable customers to broaden their choices and buy more easily, while optimizing costs. NCE licensing creates a standardization of offers and terms by reducing CSP’s pre-existing array of options. This NCE plan includes term subscriptions that reward loyalty and commitment to Microsoft.
The NCE plan is directed at commercial businesses only. Government and non-profit organizations will not be affected by this plan.
With this new platform, Microsoft will be adding guidelines for how users can add and remove licenses to a subscription. This updated process goes into effect on March 1, 2022, and the details you need to know are outlined below:
Monthly Subscription - This option allows for the most flexibility
> The change in NCE will enact a 20% increase to current subscriptions under the CSP plan.
> Upgrades are available for mid-level products, while there are no downgrades permitted
> Billing will be expected upfront on the first of every month
Listed below are the seat-based subscriptions impacted by the changes:
See our article about Microsoft Office 365 Business plan review.
While it is not directly tied to the new commerce experience, Microsoft will be increasing its pricing on average for each of its bundles by an average of 15%. The amount of increase will depend on your SKU and begins on March 1st 2022.
This is the first significant price increase since Office 365 was launched 10 years ago; and reflects the value of innovation that’s been added over the years.
As a result, no matter what plan your company decides on with the NCE subscription (monthly, annually, tri annually), you will be paying more for Microsoft services after March 1st, 2022.
The chart below reflects the increase from each individual SKU.
March 1st 2022 – From March 1st onward, all new and renewing subscriptions must be purchased through NCE (Legacy CSP customers will be able to finish their existing terms).
July 1st 2022 - Legacy CSP customers must renew to the NCE plan to continue subscriptions.
October 1st 2022 – All customers will have to purchase through NCE, partner incentives and rebates are removed.
For Legacy CSP customers, there are a few key dates to remember. All new subscriptions must be made on NCE after March 1st 2022.
However, the ability to renew existing subscriptions on the legacy CSP platform will continue through June 30th 2022, ending on July 1st 2022. Legacy subscriptions will remain in effect until each of the subscription term’s end.
Microsoft partner incentive rebates on legacy subscriptions will be removed in October 2022. After June, legacy customers will have to renew subscriptions in the New Commerce Experience to continue Microsoft services.
The option to switch plans from annual to monthly is only available within 72 hours after placing an order for an annual subscription.
This would require you to cancel the annual commitment offer within 72 hours of placing the order to receive a pro-rated refund. You can then place the order for the Monthly commitment offer.
You cannot switch from an annual commitment offer to a monthly commitment offer outside of the initial 72 hours.
The New Commerce Experience (NCE) will have an impact if you are:
Pros:
The NCE monthly plan STILL offers companies the most flexibility. This is especially true if your organization has a lot of turnover. By retaining this plan, you can re-evaluate your organizations need for Microsoft products every month.
You are able to upgrade or downgrade subscriptions during each month
With the monthly option, you are free to to ADD MORE and Decrease the amount of licenses each month
Cons:
The flexibility of this term will come with a 20% increase to pricing.
Read our 5-Step guide to get the most of out your Microsoft 365 licenses.
Yes, you can enact a plan with two terms in the same offer. In a small-midsize business space, temporary employees are common over the course of the year.
For these customers, mixing annual and monthly agreements for permanent and temporary users may be the most cost effective and flexible solution.
For example, as a partner, you can elect to mix monthly, annual, or multi-year term expiration. This alternative route gives you maximum flexibility to choose the right term for your company.
Company A has 500 employees and purchases the Microsoft NCE Annual plan.
They order 500 licenses for the full year. Throughout the year, 80 employees leave the company, leaving Company A overpaying for these 80 unused licenses.
Company B has 500 employees also. However, they decide on using the NCE Annual plan for 400 users while using a NCE Monthly plan for 100 users.
Company B will pay 20% extra on the monthly price for these 100 users, but will save on the annual subscription costs of the departed employees.
The cancellation policies are slightly changing with the NCE plan. With the CSP plan, Microsoft allowed 30 days to use the services; and offered a full refund and a cancellation policy within the first 30 days of use.
Beginning March 1st, this cancellation period will change to a 3 day trial period to cancel, and a 24 hour period for a refund.
Microsoft 365, Dynamics 365, Power Platform, and Windows 365 offers, plus associated add-ons.
Yes. The billing cycle will be updated to reflect a beginning-of-month to last day-of-month cycle.
Yes. As well as continuing with the 12-month commit term, Microsoft will be introducing 1-month and 3-year commitment terms for subscriptions.
Yes. You can choose to commit to a 1-year or 3-year term and pay for subscriptions monthly. However, you will be unable to decrease seat count or subscription type each month during the commitment period. You can only do this at renewal.
You CAN INCREASE your subscriptions seat count mid-term with immediate effect and the additional seats will be pro-rated to the original commit term end date.
You CANNOT DECREASE your subscriptions seat count mid-term. You will have to wait until subscription commit term renewal to reduce the seat count.
You CAN UPGRADE your subscription(s) mid-term (partial/all) with immediate effect and the upgraded subscription will be pro-rated to the original commit term end date.
You CANNOT DOWNGRADE your subscription(s) mid-term. You will need to wait until subscription commit term renewal to downgrade/change to a lesser subscription.
Yes, you can increase your subscription(s) seat count mid-term and the additional seats will be pro-rated to the original commit term end date.
Originally planned for March 10th 2022, Microsoft announced on November 12th 2021 that they will extend the period during which subscriptions can be renewed on the legacy CSP platform to June 30th 2022.
Learn how to take complete control of your Microsoft 365 with Managed Services.
Monthly subscriptions at a premium
No price protection, month-to-month exchange rate
72-hour cancellation window
Pay by day is unavailable, upgrades are permitted mid-term for some products, and downgrades are not permitted on any license
Quantity increases are possible, but no decreases during the term
More stability in price for the term of the contract
Annual subscriptions can be paid either monthly or upfront
Price advantages for annual agreements
72-hour cancellation window or at-term renewal at the end of the year period
Upgrades are available mid-term for some products, downgrades are not permitted on any license
Quantity increases are possible, but no decreases during the term
To many organizations, the switch from CSP to NCE and the price increase is a surprise; and NCE creates a decision to be made within the company.
Datalink Networks makes the NCE transition easy. We offer a free analysis on your Microsoft licensing plan through our health check. Our team of trusted professionals will find the most cost efficient and sustainable strategy to implement Microsoft's essential applications for your business.
We conduct thorough analysis and offers solutions to each organization struggling with this transition. Through our Microsoft 365 Health Check, Datalink Networks eliminates confusion and has saved its existing clients an average of $7,100 per check.
What our health check will do for you:
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