Microsoft’s NCE (New Commerce Experience)
Microsoft recently announced a major change to their licensing program.
We decided it is worth while sharing with you what we have discovered, how it this will impact your business.
Microsoft has launched the New Commerce Experience (NCE) initiative, which changes how you consume Microsoft licenses. Microsoft 365 subscriptions must move to this new platform in 2022. Microsoft is also increasing pricing for several Microsoft 365 subscriptions on March 1, 2022.
- You can see more details from Microsoft here. (note prices in article are USD not AUD)
Why Is Microsoft Changing their 365 Licensing?
Microsoft is trying to consolidate their many licensing programs and basically reduce the complexity around it.
Even with the changes detailed below, we continue to believe Microsoft 365 to be a great value for organizations. This is especially true of Business Premium which bundles in security, autopilot, and Intune.
In all our years of managing our clients Technology this is the first real major increase from Microsoft in over a decade.
Since the last price increase, they’ve added 24 new Applications along with over 1,400 new features that have been added to your subscription.
What are the Price Increases?
Microsoft is raising fees on certain 365 subscriptions on March 1st, 2022. Most of the price increases are between 10 to 15%. The specific details, rationale, and US Dollar pricing can be found here:
In addition, and separately, Microsoft recently announced a new 20% price premium for monthly licensing flexibility. This is over and above the price increases noted above.
What You Need to Know
Microsoft has recently dropped hundreds of pages of information about NCE on the Microsoft partner community. We are still learning, but have identified some critical points we wish to share:
- Licensing Commitments – you must choose between annual and monthly licensing commitments, as we can no longer terminate annual licenses ahead of their renewal date. Microsoft is adding a 20% premium for monthly licensing flexibility. You can have a mix of annual and monthly licenses for the same subscriptions.
- Annual Licenses – annual subscription commitments are price protected for the year. Any add-on subscriptions of the same type are added under the existing term and price. New subscription types have their own renewal date. For example, adding your first Microsoft Visio subscription would be under a new one-year commitment despite having Business Premium subscriptions expiring in four months.
- Monthly Licenses – in addition to the 20% price premium, monthly licenses do not have any price protection and may be adjusted by Microsoft monthly.
- Payments – some Microsoft partners require upfront payment for annual licenses because Microsoft will charge partners in full, regardless of whether the client honours payment. That will not be F12’s approach. We will continue to offer monthly payments for annual subscription commitments to all clients in good standing.
- Cancellation – licenses can only be cancelled within 72 hours of procurement or after the commitment expires.
- License Reassignment – licenses can be reassigned between users. For example, if you remove two users from 365 you can reassign those spare licenses to two new users.
- Automatic Renewal – by default all subscriptions will renew automatically. F12 is building automation to ensure that licenses counts are reduced to the number actually consumed at their renewal date. This will protect our customers from being locked into additional licensing because of missing a renewal date.