Have you worked with your partner to transition from legacy CSP to the New Commerce Experience yet? If you missed 5% promotional discount to transition to NCE by March 31st, 2022, you may notice a 20% price increase from Microsoft starting in July.
Microsoft’s introduction of the New Commerce Experience in January of 2022 has been a disruptive transition for customers and partners alike. For the first time, customers transitioning into NCE were forced to choose annual or monthly terms for each of their Microsoft Online Services Subscriptions. A large factor in this decision for customers was the introduction of a 20% premium for any subscriptions that customers chose to keep on a monthly term. Microsoft explained this premium was aligned with industry standards and are using it to help eliminate subscription churn from their user base. Microsoft gracefully offered promotions to customers who opted to stick with monthly commitments through the end of their fiscal year (June 30, 2022).
The promotion used to offset the 20% monthly term premium are set to expire July 1, 2022 and many customers may be in for a rude awakening when they receive their next Microsoft 365 bill.
Though this premium will impact all customers who have not transitioned to NCE, not all customers will be subject to the price increase on their July invoice. Legacy CSP customers with existing subscriptions were setup within Microsoft’s system with a term (1 year by default). Each subscription auto-renewed at the end of this term with no impact to customers. Effective July 1st, subscriptions will no longer auto-renew into a new legacy CSP term and each subscription will require a transition into the New Commerce Experience at the end of their term. At the time of transition customers will work with their CSP partner to decide on a term for each of the subscriptions they are using that fits the needs of their business.
In addition to ending the auto-renewal of legacy CSP terms, starting July 1st, Microsoft will also require all new product purchases to be bought via New Commerce Experience. Customers who are looking to add new products or features will be asked to choose between an annual or monthly term at the time of purchase. For customers with existing subscriptions remaining on legacy CSP this will create invoice and/or renewal date sprawl as you will create separate terms for each new product purchased from Microsoft. Microsoft does offer co-termination of products on the New Commerce Experience but that will not be available to customers with existing subscriptions on legacy CSP who add products via New Commerce Experience.
CloudServus licensing customers were made aware of these changes as they were announced in Q4 of 2021. We have successfully transitioned all our eligible legacy CSP licensing customers to the New Commerce Experience helping them take advantage of applicable Microsoft promotions and securing the most aggressive pricing possible. We would be happy to educate and advise organizations who are unsure of whether they will be subject to this price increase. We have a wealth of experience in transitioning customers paying MSRP direct (Microsoft.com) and from legacy agreements such as Enterprise Agreements, MPSA and/or Open Value onto the New Commerce Experience. This transition to proactively move into the flagship licensing vehicle for Microsoft 365 subscriptions will set your organization up for long-term success with Microsoft.
Contact us today to review your current licensing and discuss your goals with your Microsoft partnership.