Microsoft’s New Commerce Experience & What it Means for Our Customers
As many customers are aware, Microsoft’s licensing experience includes a huge array of choices. Each one comes with its own set of terms, conditions, licencing rules, stipulations, and complexities.
Moving forward, Microsoft aim to simplify the buying experience for customers, through the launch of a new model for subscription licensing, called the “New Commerce Experience” (NCE)
The new model aims to reduce subscription license complexity and costs, while giving customers the flexibility to tailor purchases to their business needs.
NCE applies to seat-based subscriptions including Dynamics 365, Microsoft 365 and the Power Platform.
What are the major changes to expect?
The New Commerce Experience introduces a variety of purchasing options for end customers of per-seat licensing.
The new purchasing options are:
NCE Short-Term Commitment: Monthly Subscription
- This option provides a monthly term, allowing the number of seats to be increased, decreased, or cancelled – each month – with only month-to-month commitment required.
- Monthly subscriptions will incur a 20% premium, in recognition of the flexibility offered.
- Under this option, customers can cancel with only 30 days notice. Customers can also increase or reduce the number of seats purchased at the end of each month, to meet changing business requirements.
- Price increases are not protected and will increase in line with any price changes made by Microsoft.
- A 72 hour cancellation window is available for new purchases.
NCE Long-Term Commitment: 12 or 36 Month Subscriptions
- .By committing to a 12 / 36 month term, customers receive protection from cost increases for the full 12 / 36 months.
- The subscription can only be cancelled within the first 72 hours (with pro-rated billing). From this point, customers cannot cancel and will be committed to the full 12 / 36 months.
- Decreases to the number of seats purchased can’t be made within this period, but seats can be increased with pro-rated billing.
- Subscriptions can only be terminated after each 12 / 36 month term.
Does the New Commerce Experience change any of my existing subscriptions?
Although the new model launches in January 2022, it won’t be enforced until 30th June 2022 for existing subscriptions. This means that you can switch to the NCE at any time prior to 30th June.
However, any new subscriptions added on, or after, 10th March 2022 will only be available via the NCE model. From 30th June 2022, all renewals will only be allowed via the New Commerce Experience.
If you have a existing licence with a renewal date after 30th June 2022, it will continue as normal until renewal, at which point it will transition to the NCE.
Can I mix subscriptions?
Yes, you are able to mix subscriptions with the New Commerce Experience. You can purchase a combination of both monthly term and 12 or 36 month term subscriptions. This option is particularly suitable for a business that has seasonal employees.
What if I need to cancel my subscription?
All subscriptions come with a 72 hour cancellation window. After this period has passed, a subscription cannot be cancelled until the full term has elapsed. Monthly subscriptions are recommended for customers who are not entirely certain of committing to a 12 or 36 month term, as this allows for cancellation at the end of each month, if needed.
Does the NCE apply to all customers?
Initially, the NCE model only applies to commercial pricing. No announcements have been made about any changes to not-for-profit, academic, or government models, however, this could change in the future.
Please note that this new model is subject to change and further changes may be announced by Microsoft.
While many customers will be used to a changing Microsoft licensing landscape, we’ll be working closely with all of of our customers to navigate these latest updates.
If you’d like to discuss any of the changes with us in more detail before then, please contact your Customer Success Manager, or email firstname.lastname@example.org