Microsoft introduces changes to its licensing arrangements for housing associations

Microsoft have recently implemented the largest shake up of its software licensing arrangements for some time

The new licensing scheme is called the New Commerce Experience, or NCE for short. Separately, Microsoft have also announced a price increase across most of their most popular software subscriptions. 

Since its launch a decade ago, Office 365 has now grown to over 300 million customers. In fact, since introducing Microsoft 365, 24 new apps have been added to the suite. Microsoft have released over 1,400 new features and capabilities across three key areas. 

Communication and collaboration

Microsoft Teams – it’s fair to say that Teams has helped the housing sector work effectively throughout the pandemic! 

Security and compliance

The cyber security landscape is more complex than ever. With the accelerating volume, sophistication, and scale of cyberattacks, security and compliance are a priority for every housing association.  

AI and automation

Over the past decade, Microsoft have introduced artificial intelligence AI and digital process automation capabilities which has enhanced productivity and collaboration. The Power Platform has seen massive and widespread interest across the housing sector and is now being used to mobilise working practices and liberate data for field workers across all business areas. 

The price increase is separate from NCE

The price increase affects everyone including housing associations. NCE only applies to a small number of housing associations who do not qualify for the special public sector pricing that the UK government has negotiated – which is called DTA21 (Digital Transformation Agreement). 

For housing associations who have embraced cloud computing over recent years, the annual commitment for their Microsoft cloud subscription is most likely the single largest item on expenditure within the IT budget. Therefore, any news about price increases will not be very well received. 

There are three things we can do to proactively control the impact of this

1. Appoint a senior person within your association and task them with taking an active and direct interest in Microsoft’s licensing renewals.  
2. Engage the help of a Microsoft partner such as TSG to check that you are purchasing your licensing using the correct pricing framework.  
3. Ensure that the licenses you have purchased are then ‘rightsized’ to your environment and your specific and exact requirements.  

There are strategic and tactical methods that can then be employed to control and optimise your licensing costs which could generate some considerable savings. Subject to eligibility checks, TSG can direct you the DTA21 Public Sector licensing subscription model which offers a discount from Microsoft’s list pricing and is a better option for most housing associations over NCE pricing.  

Software license rightsizing is a cost control and cost optimisation technique which ensures that you: 

1. Are licensed appropriately and dynamically for the number of users you have at any given time 
2. Fully exploit all your Microsoft licensing benefits and entitlements 
3. De-duplicate unnecessary line items of IT expenditure  
4. Map your licensing needs to a fully developed cloud adoption roadmap so that you only scale up your investment in licenses when you need to, and not before, supported by a clear and tangible ROI return on investment 

Many housing associations are going through some form of digital transformation and Microsoft cloud services are a key feature of this transformation. However, it can be very challenging to setup and maintaining a fully optimised licensing strategy for your Microsoft subscriptions. 

We would strongly and urgently recommend that you take a close look and keen interest in your current Microsoft licensing arrangements to apply the tactics outlined in this blog to manage these costs appropriately. The urgency for this is particularly pronounced in the wake of NCE and the impact this will have if left unchecked. This can be a complicated subject but TSG are happy to support any housing association who wants to take the opportunity to strategically plan and manage the profile of the largest single item of IT expenditure. Microsoft licencing expenditure can be extremely good value for money when the products you have subscribed to are widely adopted and used – it is extremely poor value when housing associations just use email and Word in the cloud! 

Cloud adoption is increasing across the housing sector, so expenditure will increase proportionality compared to current levels of investment. Therefore, it makes sense to take this opportunity now to ensure you have strong control, checks and balances in place to manage this effectively now and ongoing. 

Feel free to contact steven.osprey@tsg.com for further information and support 

NCE Fact sheet: