Microsoft New Commerce Experience (NCE)

Your guide to Microsoft license and pricing changes in 2022

Microsoft’s recent licensing changes may have left you feeling unsure about what this means for your organisation.

 We’ve provided a guide below on how to navigate these changes and will be offering exclusive training sessions to help you understand what the best route is for your organisation.

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TSG CEO Rory McKeand explains the upcoming changes

Our CEO, Rory McKeand, explains what the changes in Microsoft licensing will mean for your organisation.

So, what are the key changes?

There are three core changes to be aware of:

  1. A price increase in the core O365 and M365 plans from 1st March 2022.
  2. Introduction of the New Commerce Experience (NCE) from January 2022, replacing the current purchasing model, with 1, 12, and 36-month subscription commitment terms.
  3. Customers with Enterprise Agreements (EA) for 2,400 seats or less can now experience the benefits of working with a Microsoft Cloud Solution Partner (CSP), instead of purchasing or renewing directly with Microsoft.

Options are to take action between January and 1st March to avoid significant price increases:

  1. Lift and shift your existing license mix to NCE before 1st March 2022.
  2. Audit your license estate and define your requirements for the future, and move before 1st March 2022.
  3. Do nothing, and experience enforced renewal in June 2022 and the associated price increases.

Microsoft License Price Increases

From 1st March 2022, updates to the commercial pricing for  Office 365 and Microsoft 365 licensing will take effect. Without action, customers can expect around a 20% increase in total license costs for the following Office 365 and Microsoft 365 products:

  • Microsoft 365 Business Basic
  • Microsoft 365 Business Premium
  • Office 365 E1
  • Office 365 E3
  • Office 365 E5
  • Microsoft 365 E3

If you currently have a plan that extends past 1st March 2022, you are price protected for the term of that subscription. Those prices will then increase at the point of renewal.

There are currently no price increases for consumers, education, or non-profit organisations.

New Commerce Experience (NCE)

NCE is Microsoft’s new seat-based license program. Designed to reduce complexity and cost, the new platform provides customers with flexibility on a range of licensing scenarios. Upon its launch in January 2022, customers can take advantage of promotional offers for a limited amount of time.

Organisations transacting their licenses through the Cloud Solution Provider (CSP) Program will be impacted by this change as they will need to understand the mix of licenses required to move to the 1, 12, and 36-month subscription commitment term – and ahead of March to beat the price increase.

TSG can help you to navigate the changes and beat the price increase through the early adoption of NCE to experience the promotional offers available.

Changes to Enterprise Agreements (EA)

If you are currently purchasing licenses through an EA, and have less than 2,400 users, you will now need to purchase via a CSP.

With a CSP, you’ll get the benefit of premier Microsoft support (which would cost more with an EA), and more flexibility by building your license plan across different commitment terms (which is a flat 3 years with EA).

What to do next

TSG is helping our customers and other organisations with Microsoft agreements navigate these changes with our training and advisory services.

Register for one of our exclusive training sessions hosted by our Microsoft Training Team.

Get in touch with our Microsoft License experts to help you design the best licensing mix for your organisation.

Watch our training webinar

Watch our virtual NCE training session webinar.

The TSG Microsoft training division talks about the Microsoft Licensing that will be coming into effect from 1st March 2022 and the impact of the New Commerce Experience (NCE). Featuring a live Q&A.

NCE Training Webinar

FAQ

Microsoft is introducing significant changes to seat-based offerings in Microsoft licensing. These changes are the first major set of changes since 2015. By seat-based offers we mean, Office 365, Microsoft 365 and Dynamics. At the same time, Microsoft also announced a pricing increase for selected products. 

Yes, TSG can provide your organisation with Microsoft seat-based licensing right up to a quantity of 2,400 seats. If you are already a TSG customer, it is important to discuss your plans with your TSG Customer Success Manager.

If you are already a TSG customer, it is important to discuss your plans with your TSG Customer Success Manager. There is an option for a rolling 30-day agreement that permits month-on-month license quantity reduction. 

As far in advance of 1st March 2022 as possible, TSG strongly recommend discussing the most appropriate way forward for your organisation. If you are already a TSG customer, please discuss your plans with your TSG Customer Success Manager. 

Yes, you can mix subscriptions to have the right mix of flexibility and price.  

Correct, the Microsoft 365 price change will be reflected in March 2022 for NCE as well. This means that if a customer decides to switch from Annual (monthly billed) to Monthly in NCE, they will experience the 15% – 20% price increase with certain Microsoft 365 products AND the 20% price premium with Monthly NCE. 

Monthly subscriptions in NCE offer more flexibility to the partner and customer, however, cancellations after the 72-hour UTC cancellation window will not receive a pro-rated refund for the rest of the month. Instead, the monthly subscription will run to its end date and cancel. The partner and customer should still expect to be billed for the full month. 

You now have seven calendar days–increased from 72 hours–to cancel or reduce seats after ordering or renewing new commerce subscriptions in CSP.

TSG strongly recommend discussing your current situation and operational plans moving forward with your TSG Customer Success Manager in January or early February 2022.

If you need your Microsoft licenses and platform to continue beyond your current contract term, you must migrate to NCE.

If you no longer require your Microsoft licenses and platform, these will cease once your current contract term expires if you have no replacement NCE contract agreed.

You can speak with one of our Microsoft License experts and they’ll help you design the best licensing mix for your organisation; simply complete the form at the bottom of this page.

Yes. Example: customer has a Microsoft 365 Business Basic licence and wants to upgrade to Business Standard or Premium, then this is classed as a modification – and there are upgrade SKU’s available to enable this. The term of the licence would be the remaining term of the annual agreement. Please note downgrading the licence (either the plan or number of users) is not permitted mid-term.

Co-termed. If you added additional licences 4-months into a 12-month agreement, the new licences would run for 8-months in line with the start and end date of the initial licence agreement. This only applies if adding additional licenses to a current plan type – not licensing an entirely new plan type.

If you require a new licence for a user but do not have any licences of that type currently purchased, you will start a new NCE agreement for that licence. Example: Your business has Microsoft 365 Business Standard for all users in place, but you have a new user who requires Business Premium. This is not a modification; it is a new agreement and your 12 months (or monthly at a 20% premium) for Business Premium licence would start from the date you purchase the new licence. You can then add more new users to this plan and any new users are co-termed with the start date of the agreement for Business Premium.

Every time you order a new product that you do not currently have (not an upgrade) this requires a new agreement.

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