Microsoft recently announced changes to the licencing models for their cloud products, to evolve with customers to meet their ever-changing business.
Technology and the covid-19 pandemic has amplified change for organisations worldwide. Therefore, it’s important that our businesses are constantly evolving to support the shifting needs of the workplace. For instance as leaders around the world look to empower their people for a more flexible, hybrid world of work, it’s clear that every organisation will need a new operating model across people, places, and processes
To help with this, Microsoft recently announced changes to the licencing models for their cloud products, to evolve with customers to meet their ever-changing business. This change will involve moving Microsoft 365, Dynamics 365, Power Platform and Windows 365 onto the Microsoft New Commerce Experience (NCE) platform.
What is Microsoft’s New Commerce Experience?
Microsoft’s New Commerce Experience (NCE) was introduced in 2019, with Microsoft Azure being the first offering introduced to the platform. This was then followed by Azure Reserved Instances and perpetual software offers. From October 2021, Microsoft will bring seat-based cloud offers to the New Commerce Experience for Microsoft 365, Dynamics 365, and Power Platform, as well as Windows 365.
The New Commerce Experience will soon be the platform which all Microsoft products and services are provisioned. As touched on above, the reason for this is to simplify and streamline how customers buy their Microsoft products and to offer them more options for tailoring these purchases to suit their business needs.
How will Microsoft’s New Commerce Experience help your business?
The New Commerce Experience brings multiple benefits as to how you purchase your Microsoft products including:
Upcoming Development Note: As part of this continuous development, Microsoft also recently announced that they will be adding unlimited dial-in capabilities for Microsoft Teams meetings across enterprise, business, frontline, and government suites over the next few months.
What does this mean for you?
Microsoft plans to bring three-year terms to Microsoft 365 and other seat-based offers, to enable customers to lock in pricing for three years as opposed to one. Also planned is consumption-based billing for seat-based offers to enable pay-for-what-you-use pricing, along with Hybrid Use Benefits and Home Use Program availability, and a multi-geography add-on for the Microsoft 365 product suite.
With the launch of NCE, Microsoft will be enforcing a cancellation policy which means that it will only be possible to cancel within 24 hours of placing an order. In order to provide customers with the flexibility that they have previously enjoyed, as mentioned, Microsoft are introducing a monthly term offer.
However it's important to consider that it will be priced at 20% more than an annual term offer. If you cannot commit to annual term offers for all of your licences because you purchase licences based on projects etc, there is an option to have both a monthly term and an annual term subscription for the same seat-based offer simultaneously.
Which Microsoft 365 products will be affected by these changes?
In addition to the NCE announcement, the following products will be subject to an approximate 20% price increase*:
*UK pricing is expected to be released in the last week of February and pricing will be set at the current exchange rate. However, we know that Microsoft 365 Business Basic will increase from $5 to $6 per user per month, which is approximately a 20% increase.
When are these changes happening?
From March 2022 all new subscriptions of Microsoft 365, Dynamics 365, Power Platform and Windows 365 will need to be purchased through NCE. The price increase for the products listed above will occur on 1st March 2022 regardless of whether these products are on legacy or NCE.
How we can help
Over the next few months, we will be helping our customers move existing Microsoft subscriptions over to the new commerce experience as well as placing new subscription orders on new commerce. For help in the meantime or if you are not a customer but would like to discuss the options available to you, please feel free to reach out to us.
