The Microsoft New Commerce Experience and its effects in 2023
Here is a complete guide on everything you need to know about Microsoft's New Commerce Experience also know as NCE. We will explain exactly what NCE is and the impact that it may have on your business. But more importantly, we'll explain the benefits of migrating your Cloud Solution Provider (CSP) licenses to NCE and how to get the best out of your licensing.
So, what is the Microsoft New Commerce Experience?
The Microsoft NCE is a commercial model that was first launched in 2019 for Azure. Since that time, the NCE was expanded in January 2022 to include Microsoft 365, Dynamics 365 and the Power Platform. Microsoft states that the purpose of the New Commerce Experience (NCE) is to make licence management simpler, and to help support reducing the amount of complexity when managing your licensing.
Why are we talking about it now?
In 2022 as a Microsoft CSP you had the option to either renew on CSP classic or migrate over to the New Commerce Experience. Whilst some customers migrated programmes, others stayed on CSP classic. As we enter 2023, staying on classic CSP will no longer be an option, so customers will have to move onto the NCE.
How did NCE change things?
Once you take the step and switch from CSP to NCE, there a few changes you need to be aware of.
The first major change is you’ll be able to choose between 1, 12 or 36 month contracts. As they are now sold per seat, businesses can choose whether to select one package or a mixture of all three, depending on their unique requirements. Additionally, under the 12 and 36 month contracts, you can select the payment model that is most appropriate for your needs; either paying upfront, monthly or annually.
What about upgrading, you ask? Well, this can be done as many times as you want mid-term but again this will then become the minimum requirement and can’t be reduced during the term of your agreement.
Another slight change is that billing cycles will now be aligned with the start of the calendar month and, finally, auto renew can be switched off, as can cancellation periods. This is a significant change from Microsoft, with the period you can receive credits for licensing being decreased to 72 hours.
Summary of Changes
- Licensing can now be purchased both monthly and annually
- Annual subscriptions are for a full 12 months from licence date
- Monthly subscriptions are still the best choice if you need flexibility, but will cost more
- Billing cycles will align to the start of each calendar month
- Annual subscriptions can't be decreased in quantity while the licence agreement is active
- Mid-term upgrades can be purchased, and billing will be pro-rated
- Flexible licensing means you can have a mix of both monthly and annual terms, meaning if you have a minimum commitment but need a top up of flexibility, it can be achieved
One last point ...
What options do I have?
As your current agreement ends, you have three options available to you if you are yet to move to the New Commerce Experience for your Microsoft 365 licensing.
Best for organisations that prioritise flexibility
Monthly subscriptions are available, and are still the best choice if your business needs flexibilty to change seat count on a more regular basis. This flexibility does come at a premium and you can only increase, not decrease, the number of seats within this period.
Best for organisations that prioritse stability
An annual subscription still offers more control than before, giving you the option to be billed monthly or annually. Even better, fixed subscription costs for 12 months provides extra protection against further price increases within your term.
Best for organisations that prioritise stability
Like the 12-month annual subscription, it still offers the same control, giving you the option to be billed monthly, or annually. You can still increase the number of licences at any time but cannot decrease them until the end of the term.
A history of price rises?
On 1st March 2022, Microsoft increased the prices for the following core services. Many customers avoided this increase by locking into commitments prior to 1st March, which means the effects of the increases won't be felt until Q1 2023.
Microsoft price increases
Microsoft recently announced several updates to their commercial pricing for Microsoft 365. The pricing changes are set to go into effect on 1st March 2022 and will update the list pricing for these products:
|Price Increase (Per User)
|Microsoft 365 Business Basic
|From $5 to $6
|Microsoft 365 Business 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
In addition to this, in 2023 Microsoft will implement a programme to align Microsoft Cloud pricing across regions. Significant fluctuations in exchange rates in 2022 have resulted in pricing falling out of sync with USD-based pricing.
Whilst this can potentially mean price decreases, this can also lead to price increases, depending on the exchange rate.
But it’s not all doom and gloom. Microsoft has announced a discount of 16.67% off the NCE monthly commitment price until the end of 30th June 2023 for existing legacy Cloud Solution Provider (CSP) customers who are renewing to NCE.
This promotion effectively sets monthly commitment pricing equal to annual commitment pricing, while allowing customers and partners to retain the flexibility of a monthly commitment.
- Microsoft 365 for Business
- Teams Essentials
- Microsoft Defender for Business
- Dynamics 365
- Power Platform
How can boxxe help?
boxxe is a Microsoft Solutions partner, certified with the key Microsoft Azure Infrastructure and Modern Work designations, with a 30-year heritage of supporting customers by simplifying complex Microsoft licensing challenges and delivering best value.
With our dedicated Microsoft Licensing Team and the experience of supporting hundreds of customers with hundreds of thousands of users across all of Microsoft's verticals, we will be able to support you in navigating the upcoming changes.
There has been a significant amount of change in how organisations operate over the past few years, and this will have a big impact on the correct blend of licensing required. By taking a moment to review what you have today, in line with changing requirements, this will open opportunities to mitigate the cost increase and take advantage of technologies which will improve productivity and reduce IT administration overheads.
Speak to your Account Manager about a NCE Licensing Assessment today and we will help you to:
- Understand the correct buying programme to give the best commercial solution for your business
- Review your licensing estate to see where Microsoft 365 licences have been over purchased
- Understand the opportunities available to remove licences from inactive users and leavers, shared mailboxes and deleted users
Want to find out more about Microsoft NCE changes?
Chat with a Microsoft Specialist
Speak with one of our Microsoft Experts to set up a free license review. We'll make sure you get the best deals out there and see you through the process from beginning to end.