Microsoft raises prices and implements changes to subscription models as of March 2022
Microsoft already introduced its New Commerce Experience (NCE) for Azure. On March 10, 2022, Microsoft will expand this experience to include Microsoft 365 and Dynamics 365 as well. The program applies to all customers who currently buy their Microsoft licenses through CSP. Furthermore, Microsoft also announced price increases for O365 and M365 licenses starting March 1, 2022. By taking action and committing to the New Commerce Experience now, you can still purchase your chosen licenses at advantageous prices and benefit from price certainty.
What changes can you expect compared to the existing CSP model?
Through the New Commerce program, you enter into various commitments with Microsoft. In practice, there are three different subscription terms to choose from:
- 1 month: With this option, you can change your number of licenses monthly, but it does cost 20% more than an annual plan.
- 12 months: You are committed for a year and pay a fixed amount in advance every month.
- 36 months (for a limited number of D365 licenses only): By signing up for three years at once, you are guaranteed the same (monthly or annual) price for the next 36 months.
Your commitment applies for the entire duration of your selected plan. That means you must pay the full term for all your chosen licenses. Unlike the previous model, downgrading licenses will no longer be possible. Instead, you will need to wait until the end of the subscription term. You can still upgrade to a fancier version at any time, however.
When will these changes be implemented?
The NCE changes go into effect on March 10, 2022. All agreements concluded after this date will be subject to the new NCE provisions. Microsoft also announced price increases for O365 and M365 licenses starting March 1, 2022. By taking action and committing to the New Commerce Experience now, you can still purchase your chosen licenses at advantageous prices and benefit from price certainty.
How will Microsoft handle cancellations?
- For the new 12-month and 36-month plans, Microsoft will still charge you for the full term even if you cancel midway through. When you agree to a subscription, you have 72 hours to change your mind without consequences. If you do decide to cancel after the 72 hours are up, you will not receive a prorated refund for the remaining unused time.
- While you can add more licenses to your NCE agreement at any time, cancellations are only possible at the end of your 1, 12 or 36-month term. In other words, Microsoft will hold you to the agreed term.
Is there a way to reduce the number of subscriptions month by month?
Microsoft does offer a monthly subscription plan as part of its NCE program. With this plan, you are free to add or subtract licenses each month.
Please note that the monthly option is quite a bit pricier than a one-year plan and will cost you as much as 20% more annually. Unlike the plans for 12 or 36 months, prices for monthly subscriptions are not fixed and can change month by month.
Is it possible to combine subscriptions of varying lengths?
Yes, Microsoft allows customers to combine different licenses within the NCE program. That way, you have the flexibility you need to support employees with both permanent and temporary contracts and can gain more control by reserving the ability to reduce or cancel a portion of your company's licenses in a given month.
You could commit to 12-month subscriptions for 85% of your Microsoft 365 licences, for instance.
You would then opt for monthly subscriptions for the remaining 15%. This preserves some flexibility, while still allowing you to benefit from better prices for the majority of your subscriptions.
Want to find out more?
Don't hesitate to reach out to our license desk. They are happy to take the time to chart your current situation and figure out the best licensing model.
