Microsoft New Commerce Experience & Price Increases – What Does It All Mean?

As part of the Microsoft Cloud Solution Provider (CSP) program, we are letting everyone know that important changes to the program so that, together, we might prepare for them. There are two major aspects to these changes. First, there is a global price increase on some of the most popular licensing products for commercial clients. The second is new contractual arrangements that come into force as part of an update to the Microsoft CSP program which Microsoft calls the New Commerce Experience (NCE).

What Are the Key Dates For Microsoft Licensing Changes:

1. General availability of NCE Subscriptions will be in January 2022
2. Announced Microsoft Price Increase comes into effect 1st March 2022
3. Customers can still procure via the existing ‘legacy’ route until NCE is mandated on 10th March 2022 (New subscriptions only)
4. Customers can renew via the existing ‘legacy’ route until 30th June 2022
5. There will be promotions available for monthly and 12-month term subscriptions for all seat-based offer types (except Windows 365) up to 2,400 seats

New Price Increases To Microsoft Licensing

On August 19th, 2021, Microsoft announced that it was increasing the pricing globally of some of its most popular licensing products. This includes Microsoft 365 Business Basic, Microsoft 365 Business Premium, Office 365 E1, Office 365 E3, Office 365 E5, and Microsoft 365 E3 from the 1st March 2022 for commercial customers. As the original announcement states, there will be local market adjustments, but we do not know the exact impact this will have yet, or whether other licenses will be affected here in the UK. However, from the announcement, we anticipate that this will likely result in a 10-25% increase in Microsoft licensing costs for the vast majority of our Microsoft 365 customers. 

What is the Microsoft New Commerce Experience (NCE)?

The second, and potentially more significant, change Microsoft has announced is the new subscription options that come into force as part of Microsoft’s New Commerce Experience (NCE) – the latest evolution of the Microsoft CSP program.

Up until now, within the UK, it has been possible to increase or decrease your Microsoft 365 licenses as and when required with minimal restrictions even though, technically, clients entered into a 12-month agreement with Microsoft and their chosen Microsoft CSP Partner. This will change for all new subscriptions from the 10th March 2022 and all customers seeking to renew after the 30th June 2022.  

What are the 3 New Subscription Options For Microsoft NCE?

1. Monthly SubscriptionNCE will provide customers with the opportunity to consume Online Services on a true monthly basis without the need for an annual commitment. This will provide additional flexibility for customers who need to make regular changes on a month-by-month basis to their seat count and plans.  The monthly subscription via NCE comes at a premium of an uplift of 20% across all online services plans. This is in addition to the announced price increases.
    
2. 12 Month SubscriptionThe 12-month subscription via NCE will provide customers with the opportunity to consume online services on an annual commitment basis. Unlike the legacy CSP model customers who consume on a 12-month subscription, you will have the option to be billed on a monthly or annual basis. Pricing will be locked in for the duration of the term which provides customers with additional cost savings and security against any price increases due in that time. You can increase seats during the 12-month subscription term but are not able to reduce seat count. 
3. 36 Month Subscription – Not Available until later in 2022
   As a part of NCE, Multi-Year Pricing will be coming to CSP. This will allow for customers to secure 3-year pricing upfront for a longer-term commitment. Customers who consume via this model will have the option to be billed monthly, annually, or upfront. Similarly, to the monthly and 12-month subscription terms, they will not be able to reduce their seat count for the duration of the term. 

* Subject to conditions 

In addition to these changes Microsoft have also announced a range of new features as part of these two announcements including Multi-Geo, Home Use Program (HUP) and Hybrid Use Benefits (HUB) for NCE customers during 2022. 

What do I need to do to prepare for the Microsoft New Commerce Experience?

By entering into a 12-month agreement on the NCE before 1st March 2022 it should be possible to delay the impact of the price increases by up to 12 months. In addition, it is possible to mix-and-match the 12-month and Monthly subscriptions to preserve an element of flexibility for example if an organisation had 100 users but anticipated that during the following 12 months it may need to reduce its seat count to 80 users then it would be possible to take out a 12-month subscription for 80 users and further Monthly subscription for 20 users.  

ACS will be in contact with all our Microsoft CSP clients in the coming weeks to ensure that they are aware of the forthcoming changes and to help you to decide on what action you would like to take. We anticipate February to be particularly busy and so we are recommending clients seek to decide and act in January where-ever possible.

In addition to this, if you are not a current ACS client but have questions or worries about the NCE, please do get in touch! Our IT experts can help answer any questions you may have about the NCE, and help ensure you are getting the most out of your Microsoft licenses. With over 25 years IT experience and being a trusted, accredited Microsoft partner – we are able to deliver innovative, cost-effective IT solutions which are delivered in a language you will understand.

If you have any questions or concerns, please do not hesitate to contact your ACS Account Manager or the ACS Licensing Team on 01604 704000 or license.requests@acs365.co.uk