Microsoft is about to overhaul its current Cloud Solution Providers (CSP) licensing program. This means that different models that Microsoft now uses will be merged into one license model. According to Microsoft, this will provide more flexibility to meet different needs.
This information is based on the latest announcements from Microsoft, but is subject to change until official release.
What will Microsoft change?
Microsoft currently has different licensing models and wants to harmonize this extensively. Microsoft calls this “New Commerce Experience (NCE)”. This model will provide more flexibility to meet different usage needs. Plus ensure consistent policies, agreements and procedures across all Microsoft cloud products and procurement channels.
The NCE will initially only apply to agreements for business customers. NCE does not yet apply to Not for Profit and Education channels. But it is expected that this will eventually happen.
Under a global Microsoft customer agreement, NCE covers transactions for self-service (web direct), Enterprise and CSP. As a result, all IT providers worldwide are required to transition their CSP billing from customer licenses to the New Commerce Experience.
What changes can you expect compared to the CSP model?
- Standardized cancellation policies consistent with existing non-CSP Microsoft licensing programs and subscription models, including Azure.
- New subscription period of one month, so you can adjust the number of users from month to month according to your needs. This way you can cancel licenses every month without any further financial obligations.
- Flexibility to schedule subscription changes before the renewal date; more or less users.
- New option to fix license fees by entering into a 36 month term. (This will probably only be possible after July 1, 2022.)
The NCE may cause some concern, but at Lantack, we're here to help you through this transition. They will walk you through the changes and explain what the NCE means for your existing subscriptions to Dynamics & Microsoft 365 licenses.
Even if you now purchase your Microsoft licenses from another Microsoft partner, we will be happy to explain how NCE affects your licenses.
When will these changes take effect?
The NCE will take effect on January 1, 2022. There is a transition period, which will last until March 1. During this period, CSP and NCE will be available side by side; after March 1, only NCE.
Between January 1, 2022 and February 28, 2022, you can:
- Cancel and renew existing subscriptions under the new NCE terms
- Renew the subscriptions under the current CSP model
There is an NCE early adopter promotion for orders placed between January and June 2022 that will save you money on monthly and annual installment orders.
Subscriptions with a duration of 36 months are not immediately available in January, they are estimated to be offered from July 2022.
Important to know:
- Until February 28, 2022, you can renew or purchase the subscriptions under the conditions of the existing CSP model.
- February 2022 is the last month for existing customers to renew their subscription under the legacy CSP model and current billing terms for Dynamics 365, Microsoft 365, Office 365, and the Power Platform. To delay this change for as long as possible, organizations can choose to cancel their agreement in February 2022 and immediately reorder under the same CSP terms for an additional 12 months.
- From March 1, 2023, all customer agreements will be concluded under NCE conditions.
What is Microsoft changing about the cancellation policy?
- For the new 12-month or 36-month agreement, Microsoft will charge all cancellations for the full remaining term.
When you purchase a subscription, you have 72 hours to cancel it at no cost (based on UTC zone). After this 72-hour cancellation period, there is no pro-rata refund for the unexpired term for cancellations. - During the term of an NCE agreement, you can add additional licenses, but you can only terminate subscriptions at the end of the 12 or 36 month period. In other words: Microsoft keeps you to the agreed period.
- If an organization purchases licenses through NCE, you cannot transfer the billing to another partner until the agreement expires.
How can you reduce the number of subscriptions month-on-month?
Within the NCE, Microsoft offers a subscription period of one month, so that you can decrease or increase the number of licenses per month. Please note: a monthly subscription is considerably more expensive than an annual subscription. Up to 20% calculated on an annual basis.
In contrast to subscriptions with a term of 12 or 36 months, the prices for the term of one month are only fixed for one month.
Can you purchase subscriptions in a combination of terms of 1 month, 12 months and 36 months?
Yes, within the NCE, Microsoft allows customers to combine licenses. This provides flexibility to support permanent and temporary employee scenarios and gives more control if an organization wants to reserve a portion of its licenses that can be reduced or canceled during a month.
For example, an organization may choose to keep 85% of its Dynamics 365 licenses on a 12-month agreement. The remaining 15% can be held for a term of one month, reducing the total number of subscriptions within this threshold if necessary.
NCE Subscription Terms in Brief
The overview of the subscription terms for Dynamics 365, Power Platform, Microsoft 365 and Office 365 licenses.
In addition to a discount on licenses, Microsoft also offers price protection. If Microsoft increases the prices within the period of your subscription, your subscription will not change at that time. The new price will then only apply when your subscription is renewed. The new prices will then only apply to you at the end of your current agreement and that can save you quite a bit of money.
In contrast to subscriptions with a term of 12 or 36 months, the prices for the term of one month are only fixed for one month.
Price increases apart from the NCE changes
Los van de Microsoft NCE wijzigingen gaan de prijzen voor sommige licenties per 1 maart omhoog.
De prijzen kunnen behoorlijk stijgen, afhankelijk van welke licenties je gebruikt.
- Enterprise SKUs
- Office 365 E1 van €6,70 naar €8,38
- Office 365 E3 van €19,70 naar €22,66
- Office 365 E5 van €34,40 naar €37,35
- Microsoft 365 E3 van €31,50 naar €35,44
- Business SKUs
- Microsoft Business Basic van €4,20 naar €5,04 (jaarabonnement)
- Microsoft Business Premium van €16,90 naar €18,59
This information is subject to change by Microsoft
