Microsoft’s New Commerce Experience (NCE) is here, bringing price increases and new changes for users, businesses and the Cloud Solution Provider (CSP) program. With over 1 billion users relying on a Microsoft Office product or service globally, the official January 10 launch presents new challenges and opportunities for the road ahead. So, what is the NCE and what does the future hold for licensed users? Let’s take a look at the latest news centered around the NCE and CSP program.

What is Microsoft’s New Commerce Experience?

Microsoft’s New Commerce Experience (NCE) is a new billing and subscription model for their Cloud Solution Provider (CSP) program and, in short, it changes the way users purchase Microsoft 365 licenses. Microsoft first launched the NCE model for Azure in 2019 and later extended CSP licensing offers to include Microsoft 365, Dynamics 365, Windows 365 and Power Platform for commercial seat-based offers in October 2021. Introduced to CSP partners in January 2022, The NCE is designed to manage subscriptions, reduce licensing complexity and support different purchasing needs in a per seat model.

Timeline and Important Dates:

• January 10, 2022 – The NCE launches and becomes available for purchase. Promotional offers begin for all new commerce seat-based commercial offers. (Windows 365 subscriptions are not eligible for the promotions listed below)
  • From January through March 2022 all annual subscriptions will be available at a 5% discount with a maximum of 2,400 seats.
  • From January through June 2022 all monthly subscriptions will be matched to current legacy annual costs with a maximum of 2,400 seats.
• March 1, 2022 – Price increases come into effect across Microsoft 365 licenses.
• March 10, 2022 – All new and renewing subscriptions are required to be purchased under the NCE.
• July 1, 2022 – Legacy CSP renewals will no longer be allowed, forcing all renewals to take place in the NCE.
• June 2023 – All legacy CSP subscriptions will be retired.

Price Changes & Subscription Options

All cloud products for Office 365, Microsoft 365, Dynamics 365 and Power Platform will be included in NCE pricing. When making a purchase on the New Commerce Experience, users will be able to select from three main options: monthly, annual and multi-year (36-month) terms. Although the NCE offers a monthly subscription option, the model is geared toward longer contract terms. Those seeking a flexible Microsoft 365 monthly commitment will be required to pay a 20% premium for these products in addition to the six plans listed below – a hefty price to pay for flexibility.

Here’s a closer look at the six core Office 365 and Microsoft 365 plans that will see price increases beginning on March 1, 2022:

Enterprise:

• Office 365 E1 increases from $8 to $10 per user per month
• Office 365 E3 increases from $20 to $23 per user per month
• Office 365 E5 increases from $35 to $38 per user per month
• Microsoft 365 E3 increases from $32 to $36 per user per month

SMB:

• Microsoft 365 Business Basic increases from $5 to $6 per user per month
• Microsoft 365 Business Premium increases from $20 to $22 per user per month

Below is a chart summarizing the NCE term conditions:

New Pricing Model’s Impact on Customers and Businesses

With new changes come mixed reactions and it’s no different with the launch of Microsoft’s NCE. While the NCE is designed to provide a handful of benefits, such as simplify licensing for users, improve revenue predictability and offering cost savings for long term commitments, the new pricing model also poses concerns for partners and small to medium-sized businesses who favor month-to-month subscriptions or want to cancel licenses as workers leave. It’s important to note that subscribers won’t be able to adapt or opt out of annual subscriptions midway through the term. And for those who want to switch managed service providers (MSP), Microsoft is now requiring all licenses to stay with the partner that the user purchased them from, so the billing relationship stays with the current MSP until the annual contract expires.

Maneuvering through new price increases, cancelation terms and considering seat counts can seem like an overwhelming task. As Microsoft’s CSP program evolves with the launch of the NCE model, the IronEdge team is here to help you navigate the changes with confidence. Contact our team today to learn more.

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