Microsoft’s NCE (New Commerce Experience)
Microsoft recently announced some big changes to their licensing programs. We want to share with you what we’ve learned, how it impacts you, and how to take advantage of a time-limited incentive.
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.
The good news is that pricing increases can be delayed if acted on during February to lock in new annual licensing under the NCE program. However, there are nuances we want you to understand before you decide.
Why Is Microsoft Changing 365 Licensing?
Microsoft is consolidating licensing programs to reduce complexity and to incent long-term commitments. NCE will encompass all Microsoft products, starting with 365 and Azure, and includes the retirement of the Open Volume Licensing program. For now, the Charity, Open Value and SPLA programs remain.
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.
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:
Microsoft notes that this is the first major increase to 365 pricing. However, Canadians saw a series of increases as the Canadian dollar declined against the US.
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.
How to Delay Price Increases
Microsoft requires customers to migrate to the NCE Portal during 2022. Further, if you complete this ahead of February 28, 2022, Microsoft will provide one year of price protection against the new annual licensing costs.
If you decide not to migrate to NCE at this time, the fee increases will come into effect starting March 1st, 2022.
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.
- Currency Fluctuations – Microsoft has signalled that their product pricing will fluctuate more frequently to account for changes in the exchange rate. In fact, although we know the USD price increases to come in effect on March 1st, we won’t know the exact CAD price until the time of purchase.
- F12 Connect – our development team is working overtime to make changes to F12 Connect to support NCE. F12 Connect will let you see your various subscriptions, commitment lengths, expiry dates, and current pricing. It will ensure you consume free licenses before procuring additional licenses and it will automatically remove unused licenses on your renewal date. This will help simplify your experience with NCE. We aim to have the upgraded F12 Connect rolled out in March.
What’s Next?
To take advantage of the price protection incentive, you will need to migrate to the NCE program. At F12, each client’s Account Manager will be reaching out to help you navigate the changes. Our team is ready to coordinate a seamless conversion to NCE as we proactively prepare for this Microsoft change.
Get in touch with us today to learn about how F12’s Infinite program can keep you up to date and ahead of the competition.
