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What Microsoft New Commerce Experience Means For You

17 November 2021
  

Microsoft is constantly adapting the Cloud Solution Provider (CSP) Program as organisations' business needs change. Recently, Microsoft announced the New Commerce Experience which applies to seat-based offers. (A seat-based offer is a subscription that's offered 'per seat' for one user for cloud services - so it doesn't matter how many devices that person uses.)

Microsoft’s New Commerce Experience (NCE) is part of a transformational journey that’s changing the way customers transact with Microsoft. It’s a multi-phase, long-term investment in the CSP programme aimed at helping partners accelerate business growth, simplify licensing, and better suit how customers prefer to purchase.

Microsoft initially added the New Commerce Experience for Microsoft Azure in 2019, and as of October 2021 included seat-based offers in CSP for Microsoft 365, Dynamics 365, Windows 365, and Power Platform.
 
NCE will change how you purchase Microsoft online services such as Microsoft 365, Dynamics 365, Power Platform and Windows 365. The goal is to reduce complexity and provide cost savings for longer term commitments, while introducing additional features to make CSP comparable to the legacy Enterprise Agreement (EA).

NCE roll-out key dates:

  • Technical preview of NCE go-live on 14 October 2021
  • General availability in January 2022
  • NCE becomes mandatory in March 2022. (Customers can procure NCE via the existing ‘legacy’ route before then.)


NCE Subscription Options

One of the big changes NCE brings is the introduction of monthly subscriptions to run alongside the existing annual subscriptions. From March 2022 a 36-month subscription will be launched as well.

Monthly subscription

NCE 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.

*Licenses can be decreased or cancelled within 72 hours of being purchased or at the end of the monthly term.

12 month subscription

The 12 month subscription via NCE will provide customers with the opportunity to consume online services on an annual commitment basis. Unlike legacy CSP model customers on an annual 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 you aren’t able to reduce seat count.

36-month subscription

As a part of NCE, Multi Year Pricing will be coming to CSP in 2022. This will allow customers to secure 3-year pricing upfront and on this model customers will have the option to be billed monthly, annually, or once upfront. As with the monthly and 12 month subscription terms they won’t be able to reduce their seat count for the duration of the term.

Microsoft’s New Commerce Experience Payment Plans Summary

Microsoft New Commerce Experience payment plans summary by ClearPeople

 

New features coming with New Commerce Experience

Multi- Geo – available in 2022

Multi-Geo allows organisations to provision and store data at rest in the various geo-locations that they have chosen to meet data residency requirements. This is currently only available for customers who consume online services via Enterprise Agreements (EA) or Enterprise Subscription Agreements (ESA).

As a part of the NCE, Multi-Geo will be available for customers consuming online services on CSP in 2022. This will give smaller organisations who do not meet the criteria for EA/ESA the ability to secure Multi-Geo pricing.

Home Use Program (HUP) – available in early 2022

The HUP will allow employees of organisations who consume online services via CSP to take advantage of purchasing a Microsoft 365 subscription with a 30% discount.

Hybrid Use Benefits (HUB) – available in 2022

HUB will allow organisations to further capitalise on their Microsoft investments made via the CSP program.

Changes in pricing

In addition to the NCE, Microsoft announced a price rise from 1 March 2022 for Microsoft 365 Business Basic, Microsoft 365 Business Premium, Office 365 E1, E3 and E5, and Microsoft 365 E3.

What action should you take?

We advise you to contact your Microsoft Account Manager or CSP provider to understand the impact for your organisation and to guide you in this transition.

Frequently Asked Questions

When will New Commerce Experience be Available?

Microsoft made NCE available on technical preview 2 on October 14th, 2021. General availability for all partners has been moved to January 2022.

Will partners be automatically moved to New Commerce Experience in January 2022?

No, if a partner would like to move to New Commerce Experience, they will need to migrate their existing subscriptions manually.

Will partners be forced to move to New Commerce Experience?

All new subscriptions for Modern and Dynamics will be required to be procured on New Commerce Experience March 2022. All existing subscriptions can remain on CSP Legacy. Partners will be able to keep existing subscriptions on New Commerce Experience and be eligible for incentives and rebates through October 2022.

Are there price changes to the SKUs included in New Commerce Experience?

While there are no price changes related to the expansion of New Commerce Experience, Microsoft has announced price increases to the following SKUs starting on March 1st, 2022:

Enterprise SKUs

      • Office 365 E1 is increasing to $10 per user per month (PUPM) from $8 PUPM
      • Office 365 E3 is increasing to $23 PUPM from $20 PUPM
      • Office 365 E5 is increasing to $38 PUPM from $35 PUPM
      • Microsoft 365 E3 is increasing to $36 PUPM from $32 PUPM

SMB SKUs

      • Microsoft 365 Business Basic is increasing to $6 PUPM from $5 PUPM
      • Microsoft 365 Business Premium is increasing to $22 PUPM from $20 PUPM

Note:

Prices for Microsoft 365 E5, Microsoft 365 Business Standard, & Frontline SKUs will not be changing at this time. These price changes will impact all public sector customers worldwide. Purchasing channels for Nonprofit solutions is not changing at this time.

Can partners receive a price protection if they provision new or 'renew' a license on or before the price change date of March 1st?

A partner can lock in price protection before the price increase in March 2022 by purchasing an annual commitment on New Commerce Experience. If the partner purchases an annual subscription on legacy, they will forfeit any incentives and rebates that would be paid out after October 2022.

What is the cancellation policy for subscriptions on New Commerce Experience?

Partners have 3 days after purchasing to cancel a subscription for a pro-rated refund. The 3-day period begins on the same day a partner starts a subscription and no refunds will be granted after the 3-day period. Once a subscription is canceled, this cannot be reversed. The subscription will immediately enter a "disabled" status where users cannot access services or files, however admins will have to access to data for subscription(s) for 90 days.

Author bio

Patrick Proesmans

Patrick Proesmans

As Head of Success I’m responsible for all activities related to the full customer success journey. We want to provide our clients the best possible customer experience and meet customer expectations. When I’m not working I try to keep the weeds out of my garden and to enjoy the Spanish sun in the Alicante area.

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