Microsoft rolls out New Commerce Experience to Microsoft 365, Dynamics 365, Power Platform and Windows 365 subscriptions on the Cloud Solution Provider programme.

 

Having launched the New Commerce Experience (NCE) for Azure plan, server subscriptions, and Azure reserved instances in 2019, Microsoft is now launching its new billing platform for Microsoft 365, Dynamics 365, Power Platform, and Windows 365.  The Cloud Solution Provider (CSP) programme will align all of Microsoft’s licence subscriptions under one model.

NCE changes how you purchase Microsoft online services and enables cost savings for longer-term commitments.  There are advantages for customers in moving to this platform now, and there are also important policy revisions around cancellation and price changes to be aware of.

So, what are your options and considerations?

You have four options.

  1. Move to the new monthly subscription option now

Up until now, Microsoft CSP licence subscriptions have all had a minimum term of 12 months and could only be cancelled on the 12-month anniversary if required.  With NCE licensing, Microsoft has introduced a new monthly subscription model for customers.

If you choose to switch to a monthly subscription, you benefit from the ability to cancel your subscription at any time with 30 days’ notice and can flex licences both up and down during this period with no penalty.  However, to gain this additional flexibility, moving to this model incurs a 20% price increase on current pricing. This 20% price increase comes into effect 1st July 2022.

Incremental believes that this option is best for organisations requiring maximum flexibility to cancel a subscription with a month’s notice or flex up or down the number of licences on a month-to-month basis.

  1. Move to the new 12-month or 36-month subscription now

If you choose to move to a 12-month or 36-month subscription, you will continue on your existing pricing (i.e. no 20% increase).  This ensures price protection during the entire subscription term for any additional licences purchased during the term.  Switch to this subscription model before 31 March 2022 to receive a 5% discount on your subscription.

However, with a 12-month or 36-month subscription you can only cancel your subscription within the first 72 hours of it commencing, and thereafter are committing to payment in full for the whole subscription term.  Furthermore, you cannot reduce the number of licences during this period.  You can increase licences at the protected per licence price set at the start of the subscription.  Incremental’s terms of business have been updated to reflect these new Microsoft policies.

Incremental believes that this option is best for organisations requiring certainty on pricing, who have a stable or growing user base, are committed to the platform for the period and want to secure the best price with price protection for the term.

  1. Move to a new hybrid subscription now

This option involves having a baseline number of licences on a 12-month or 36-month subscription, with the remainder on a monthly subscription.  Blending subscription types allows you to benefit from price protection for your core licences, whilst enabling some element of flexibility with the month-to-month subscription.  The same rules apply to the fixed and monthly subscriptions as outlined in previous sections.

  1. Move to the new 12-month, 36-month or hybrid subscription at renewal

If you decide to wait and change your subscription at renewal, the benefits and constraints are the same as set out above, with the exception that you will not benefit from the 5% discount currently on offer until 31 March 2022 for 12-month and 36-month subscriptions.

Best course of action

Incremental recommends you take time to consider your options.  However, Incremental appreciates there is a lot to consider and circumstances can vary for each customer. Watch our customer webinar with Incremental’s Iain Cherry (Business Unit Director) and Mark Gray (Head of Cloud) as they discuss all of the important changes you need to know about Microsoft’s latest NCE update.

If you have any questions on Microsoft’s New Commerce Experience or would like to discuss your situation further, please get in touch. If you would like to change your subscription, please contact your Account Manager directly or reach out to our finance team @ accounts@incrementalgroup.co.uk.