What is Microsoft NCE and what will it mean for my organization?

Sergio Darias Pérez Published on: 25/02/2022

A few months ago Microsoft announced that from March 10 the marketing of new subscriptions for "seats" referring to its core products such as Microsoft 365, Dynamics 365 and Power Platform will be purchased through the New Commerce Experience (NCE) , but how does this affect organizations?

What is Microsoft NCE? And why is this change so important?

With the goal of putting the end customer at the center and making license billing and contracting more flexible, Microsoft has launched the New Commerce Experience or NCE as it announced in the fall of 2021 to reduce the complexity that was associated in the Cloud Solution Provider program with this process, ensuring that the decision making on license acquisition rests solely with the end customer.

This is expected to make management much simpler for both customers and the Partner itself.

This transition has been a real milestone since the last price increase a decade ago with Office 365, especially since the NCE is expected to be a major financial change for organizations by including new billing dates and a ban on migration between partners until the end of the subscription period.

Therefore, we are talking about new changes being presented referring to:

The commercialization of licenses and their associated prices
Flexible billing for the customer and their consumption plan.
The new financial direction associated with the contracting for companies.

What benefits will Microsoft's new NCE bring to companies?

Acquire greater predictability of expenses and revenues.
Reducing the complexity associated with license contracting

Shall we talk about some key dates?

As of March 1 MSFT there will be a price change on Microsoft 365, Power Platform and Dynamics 365 subscriptions.
Starting March 10 New Commerce Experience will be the only way to be able to sell to new customers.
As of June 30 NCE will be the only way to be able to sell new subscriptions and renewals.
As of January 1, 2023 incentives will only be available for NCE transactions.
As of July 2023 all other CSP Legacy subscriptions must be moved to CSP NCE

What are the salient changes between CSP Legacy VS CSP NCE?

What will be the featured terms among the new NCE subscriptions?

Monthly Subscription:

It is 20% more expensive than the annual subscription.
With this option, customers will be able to increase, reduce or change their subscription at the time of renewal.
The subscription price remains the same during the contract period and may fluctuate at the time of renewal.

Annual Subscription:

The number of licenses contracted may be increased during the 36-month subscription period but in no case may the number of licenses contracted be decreased.
The subscription price remains the same during the subscription period.
Billing may be prorated on a monthly basis with an annual commitment or with an annual payment in advance.

Subscription for 36 months:

The number of licenses contracted may be increased during the 36-month subscription period but in no case may the number of licenses contracted be decreased.
The subscription price remains the same during the subscription period.

Renewal, Cancellation and Pause of subscriptions in NCE

Subscription Renewal:

An automatic renewal of the contract will occur and can be deactivated up to 72 hours after the renewal date.

Subscription cancellation:

Once the cancellation is made, and after 72 hours after the cancellation, the subscription will be immediately deactivated preventing access to services and files. However, the administrators will be able to access the data for a period of 90 days and may revert the cancellation at any time.

Pausing the subscription:

The subscription can be paused, however billing will remain the same as at the beginning of the contract. Users will not be able to access the services and files, but administrators will be able to access the data until the end of the subscription and can revert the activation of the subscription at any time.

How will the new offer catalog be drawn?

From now on, the offer catalog will be simplified into 3 parts:

Breadth Motion: targeted for small and medium sized organizations whose acquisition is less than 2,400 seats, being in this case served by Partners through the CSP program.
Enterprise Motion: Aimed at large accounts from 2,400 seats or whose turnover in Azure is greater than $ 1 M USD managed through Enterprise Agreements (EA) between Microsoft and the customer.
Self-Service Motion: Intended for small business scenarios or individual accounts where the purchase of subscriptions will be done online as self-service.

Microsoft NCE Subscription Pricing

Microsoft 365 is expected to rise in price by an average of +15% (depending on SKU*) including discounts for subscribing seats on an annual basis vs. monthly contracting models. However, it will always depend on the need of each project.

It should be noted that this significant increase has not occurred since the launch of Office 365 more than a decade ago and reflects the value of innovation that Microsoft has added over the years.

(*)The SKU is a unique ID that serves to represent a comparable stock keeping unit on a product.

We are with you all the way

We are currently working hand in hand with each of our customers in their transition process to NCE, our commitment is to always offer them a unique experience in the cloud that allows them to optimize their potential. Therefore, if you need help, do not hesitate to write to us and one of our consultants will contact you to give you a personalized answer.

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