Microsoft is increasing prices for the Microsoft 365 suite of products, and this is the first price increase in over a decade for their products. This article will cover what this means for you and how you can lock in your Microsoft 365 and managed service pricing with the new Microsoft New Commerce Experience.
In August 2021, Microsoft announced the price increases that go into effect on March 1, 2022.
All About the Microsoft New Commerce Experience
In an effort to streamline billing, Microsoft is introducing the New Commerce Experience (NCE). With the NCE, you will have three ways to pay for your Microsoft 365 licenses:
- Annual Commitment
- 3 Year Commitment
Monthly: Many businesses are already using this billing cycle, and especially if you’re already using a provider for Microsoft 365 licensing, like Evron, you’re probably already familiar with this paying methodology. This option allows you to pay for licenses month-to-month based on what you’re using. You can also lower the number of seats and save money by using the software less frequently. The significant change here is that under the NCE, you will now pay a 20% premium on all month-to-month licenses, essentially for the ease of changing your monthly licenses at will.
Annual Commitment: Your license renewal after March 2022 will need a one-time payment for a predetermined number of licenses over a 12-month term under this model.
You can increase the number of licenses at any time, but you can only reduce it once a year. You are allowed to reassign existing licenses within your business as needed.
3 Year Commitment: Similar to the annual commitment, although this would be a price lock for three years. The advantage of the 3 Year Commitment is that it shields against price increases over the next three years.
Why does this matter, and how will you benefit?
- As a savings and encouragement for you to migrate, Microsoft is offering the following time-sensitive promotion for those with month to month. These licenses migrated to NCE monthly plan before March 1st, 2022 will receive a locked-in rate, meaning month-by-month pricing will remain unchanged until June 2022. After that, the 20% price increase will apply to monthly licenses.
- The NCE is also an excellent opportunity to audit the current licenses you have to make sure you are not paying for seats you don’t need or paying a premium for features you’re not using.
Frequently Asked Questions about Pricing and NEC
Q: Can I mix and match my licensing?
Yes, you can mix the billing licenses to manage consumption better to meet your company’s specific requirements. For example, say your business needs 50 licenses for regular employees and ten additional licenses for periodic employees. In that instance, you may license the 50 under an annual or multi-year commitment and then license the other personnel on a month-to-month subscription, avoiding the 20% premium on the bulk of your licensing needs.
Q: What if I need to refund a license?
Within 72 hours of the initial subscription payment, you can receive a prorated refund. After 72 hours, the subscription cannot be canceled, and payment for the remainder of the term must be made.
Q: Can I switch from yearly to monthly?
Yes, you can within the first 72 hours of placing an order for annual billing. You can then set the order for the Monthly commitment offer. You cannot switch from a yearly commitment offer to a Monthly commitment offer outside of the initial 72 hours.
Q: Can I switch from monthly to annual?
Yes, your subscription can be changed from monthly term to annual term in NCE at the monthly term renewal.
How is Evron supporting our customers through this?
As a Microsoft CSP and in readiness for the move to NCE pricing, we are working closely with our customers. We are currently presenting the options to our clients and advising them on how to secure the best value for the migration.
- We are working with clients to identify the existing M365 licenses and determine current and forecasted needs.
- We encourage all customers to migrate as soon as possible to maximize benefits from price discounts. Part of agreeing on the timing involves ensuring that no overlapping charges caused by the minimum billing period are increased to one month.
- We are also changing our terms and conditions on license orders and in some cases introducing Master Service Agreements to streamline billing for both services.
- We are migrating our licenses to the NCE plan in advance of customer licenses to prove the process, mainly to ensure no double billing generates unnecessary costs.
These licensing changes may be challenging to navigate. We, at Evron, are happy to assist you. As a Microsoft Gold Partner and a Cloud Service Provider, we can help you figure out the best licensing approach for your firm in light of these developments.