Microsoft New Commerce Experience Explained

IT.ie
February 16, 2022

Today we are sharing some important information about the new Cloud Solution Provider (CSP) subscription purchasing platform called the New Commerce Experience (NCE).

What is the New Commerce Experience (NCE)

Microsoft’s Cloud Solution Provider (CSP) Program is ever-changing and adapting to meet the current business needs of organisations of all sizes. Microsoft’s latest evolution of the CSP program is called the New Commerce Experience (NCE).

NCE will change how you purchase Microsoft online services such as Microsoft 365, Dynamics 365, Power Platform and Windows 365. It aims to reduce complexity and provide cost savings for longer-term commitments.

What does this mean for you?

With this new platform, Microsoft will be adding some new rules for how users can add and remove licences to a subscription. This updated process goes into effect on March 1, 2022, and the details you need to know are outlined below:

There will now be 2 subscription commitment terms: Monthly and Annual.

Users who opt for the convenience of a monthly subscription will incur a 20%  surcharge from the annual subscription price. This applies to all Microsoft CSP licensing, including BC and Microsoft 365.

Users will still be able to add licences during the term of a subscription but will no longer be able to reduce the number of licences during the term of a subscription.

Full payment for the cost of the licences for the term of the subscription will be required in advance and is non-refundable.

Subscription Terms

Subscription terms can be 1-month or 12-month and there are pros and cons for each offer.

1 Month Term

Customers can have the flexibility of renewing licences every month. This is the best use case if they’re unsure of business requirements for a whole year. They can increase or decrease licence numbers each month to suit their unique business needs without the fear of being locked in for 12 months at a time – but the cost of a monthly licence will be 20% more expensive compared to an annual term fee.

12 Month Term

Probably the most popular term for SMBs, a full 1-year licence gives an economical edge and flexible billing options of either monthly or full-term upfront payments. Even better – more licences can be added in after the term start date, with their end dates aligned to the original subscription term end date so you’re not trying to remember a staggered line of licence renewal dates.

Monthly Term	12 Month Term
Month to month basis	Full 1 year / annual commitment.
Customers can change the number of licences required every month	More licences can be added during the subscription and will be aligned with the subscription term date. However, licences cannot be removed during the subscription term.
20% more expensive	Flexible billing options available, either monthly payment or full-term upfront payment.
Best use case if you are unsure about committing for the longer annual term.

What Licences are affected?

The table below shows what licences are affected and how.

Product	Fixed	Fixed	Option
	Price	Annual	Monthly
	Increase	Commit	Flexibility
Exchange Online (Plan 1)		*	*
Exchange Online (Plan 2)		*	*
Exchange Online (kiosk)		*	*
Exchange Online Archiving for Exchange Online		*	*

MS365 Business Basic (20% increase)	*	*	*
MS365 Business Premium (10% increase)	*	*	*
Office 365 E1 (25% increase)	*	*	*
Office 365 E3 (15% increase)	*	*	*
Office 365 E5 (9% increase)	*	*	*
MS365 E3 (13% increase)	*	*	*

Azure Active Directory Premium P1		*	*
Microsoft 365 Business Standard		*	*
Office 365 Advanced Threat Protection		*	*
Office 365 Business		*	*
Office 365 Business Essentials		*	*
Office 365 Business Premium		*	*
Office 365 F1		*	*
Office 365 ProPlus		*	*
Phone System		*	*

Power BI Pro		*	*
Dynamics 365 Enterprise Edition - Additional Database Storage		*	*
Dynamics 365 Enterprise Edition - Additional Non-Production Instance		*	*
Dynamics 365 Enterprise Edition - Additional Portal		*	*
Dynamics 365 Enterprise Edition Plan 1 for CRMOL Professional (Qualified Offer)		*	*
Dynamics 365 for Marketing		*	*
Dynamics 365 for Team Members Enterprise Edition - Tier 1 (1-99 users)		*	*
Dynamics 365 Sales Insights		*	*
Dynamics 365 Sales Enterprise Edition		*	*
Dynamics 365 Sales Professional		*	*
Microsoft 365 Domestic and International Calling Plan		*	*
Microsoft Teams Rooms Standard		*	*
Project Plan 1		*	*
Project Plan 3		*	*
Project Plan 3		*	*
SharePoint Online (Plan 1)		*	*
Visio plan 1		*	*
Visio Plan 2		*	*

* Applies

Questions & Answers

Are there any refunds for a 12-months term subscription cancelled early?

Refund is only possible if you cancel in the first 72 hours cancellation period. Cancellation outside of the first 72 hours does not incur a refund. You will be liable to pay for the remaining term (monthly/12-months/36-months) of the subscription

What is the first 72 hours cancellation period?

Under NCE, Microsoft provides the option to cancel the subscription and get a pro-rated refund if done within the first 72 hours of ordering a subscription. This is the only time you will qualify for a refund. The pro-rated refund is calculated at a daily rate. The 72-hour cancellation period applies to all terms: one month or annual as well as for renewed subscriptions.

Is there any flexibility possible on 72 hours cancellation period?

No. This is strictly enforced by Microsoft. If you are unsure of committing to longer subscription term periods, the best option is to choose a 1-month term.

Can the customer transition between NCE partners within their term?

No. This is not possible. The licences assigned cannot be transferred mid-term to another customer.

Can I add more licences to a subscription that I have already purchased with any term? What would be the expiry date or the end date of those newly added licences?

Yes, you can. The newly added licences would align to the same term-end of the subscription. Let’s run through an example:

You purchased 10 Microsoft 365 E3 subscription licences on 01/01/2022 for a 12-month term then add another 10 licences on 01/07/2022.

The licence expiry date of the new licences will be aligned to the subscription term end date of 31/12/2022.

You will pay for these newly added licences from when you added in July until the end of the subscription in December, choosing to use monthly or upfront as your billing option.

There are certainly some advantages and some disadvantages to the new pricing model introduced by Microsoft. Prices have largely remained static since the introduction of Office 365 in 2011 and Microsoft 365 is a very different product today with an entire ecosystem of productivity and collaboration tools available to users. The key takeaway for businesses is to fully understand that if you continue with a monthly contract you will continue to have the flexibility to add and remove licences at your discretion, but this will incur a 20% increase in your licence premium. If you opt for an annual contract, you will not incur the 20% premium and can add new licences but you will be unable to remove licences until the 12-month term has ended.

If you have any questions about the New Commerce Experience, please reach out to us via email hello@it.ie and we’ll be happy to explain everything in more detail.