Microsoft New Commerce Experience

There are some significant changes to the Microsoft Cloud Solution Provider (CSP) programme coming, impacting current Microsoft CSP agreements and Online Service Plans. 

There will be two major changes from Microsoft, a Global Price Increase on some of the most popular licensing products for commercial customers and New Contractual Arrangements that will come into force as part of an update to the Microsoft CSP program, which Microsoft is calling the New Commerce Experience (NCE).

1. Microsoft Global Price Increase

Microsoft has announced that it will be increasing pricing globally, of Microsoft 365 Business Basic, Microsoft 365 Business Premium, Office 365 E1, Office 365 E3, Office 365 E5, and Microsoft 365 E3 from the 1st of March 2022 for all commercial customers.

The exact impact in the UK market is unclear at present, however we anticipate that this will result in a 10%-25% increase on licensing costs for the vast majority of our Microsoft 365 customers. Read Microsoft's original announcement new pricing for Microsoft 365.

There will be local market adjustment, which at this stage, we do not know the exact impact, or whether other licenses will be affected within the UK. However, from the most recent announcements, we anticipate that this will likely result in a 10-25% increase in licensing costs for vast majority of our Microsoft 365 customers. 

Examples of price increase based on list price:

• Microsoft 365 Business Basic from $5 to $6
• Microsoft 365 Premium from $20 to $22
• Office 365 E1 from $8 to $10
• Office 365 E3 from $20 to $23
• Office 365 E5 from $35 to $38
• Microsoft 365 E3 from $32 to $36

2. Microsoft New Contractual Arrangements (NCE)

As you may be aware, up until now, it has been possible to increase or decrease Microsoft 365 licence quantities and plans, as and when required, with minimal restrictions.

This however will be changing for all new subscriptions from March 2022 and all customers seeking to renew after the 30th of June 2022.  

NCE will offer three new subscription types:

Monthly Subscription

NCE will provide customers with the opportunity to subscribe to Online Service plans on a true one-month term* 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 cost, with an uplift of 20% across all online service plans. This will also be in addition to the announced price increases. 

12 Month Subscription

The 12-month subscription* via NCE will provide customers with the opportunity to consume online service plans on an annual commitment basis. Unlike the legacy CSP model, customers who consume on a 12-month subscription, will have the option to be billed on a monthly or annual upfront 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. 

*Customers can increase seats during the 12-month subscription term but are not able to reduce seat count. 

36 Month Subscription – Not available until later in 2022

As a part of NCE, it is also anticipated that a multi-Year term* will be coming to CSP. This will allow for customers to secure 3-year pricing lock upfront for longer-term commitment. Customers who consume via this model will have the option to be billed monthly, annually, or upfront.

*Similarly, to the monthly and 12-month subscription terms, Customers will be unable to reduce their seat count for the duration of the term. 

Summary of subscription types and features 

 * Subject to NEW Chess terms and conditions 

3. Act Now and Lessen the Impact

Key Dates announced by Microsoft

1. General availability of NCE Subscriptions will be in January 2022
2. Announced Microsoft Price Increases, which will come into effect from 1st March 2022
3. Customers can still procure via the existing ‘legacy’ route until NCE is mandated on 10th March 2022 (New subscriptions only).

Mitigate the impact of the price changes by entering into a 12-month agreement on the NCE before 1st March 2022, this will make it possible to delay the impact of the price increases by up to 12 months.

In addition, it is possible to mix-and-match the 12-month and monthly subscriptions to preserve an element of flexibility, for example- if an organisation had 100 users but anticipated that during the following 12 months it may need to reduce its seat count to 80 users, then it would be possible to take out a 12-month subscription for 80 users and a Monthly subscription for the 20 users. 

Our team of experts can help you reduce your costs and make the most of your Microsoft 365 licence. Book your free 30-minute consultation today HERE.

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