At the beginning of this year, Microsoft started rolling out the New Commerce Experience (NCE) for Windows 365 and other programs. A few months later, in March 2022, they rolled out price increases for several licenses. As of October 2022, all Microsoft customers have to purchase through NCE. With NCE fully implemented and this new structure being the standard moving forward, it is helpful to understand what it is and how it might affect your small business.
What is the New Commerce Experience?
Microsoft’s New Commerce Experience is replacing its Cloud Solution Provider (CSP) program. Simply put, it introduces a seat-based pricing structure that changes the way that companies and other users purchase Microsoft 365 and other licenses, such as Office 365, Windows 365, Dynamics 365, and more. Now, customers manage and pay for licenses based on the amount of users, or seats.
The new pricing structure aims to bring flexibility and long-term cost savings to Microsoft Service Providers (MSPs) and commercial businesses.
When did it launch?
Microsoft actually first launched the New Commerce Experience back in 2019, with changes only applying to Microsoft Azure licensing. In the fall of 2021, Microsoft announced that it would be applying seat-based pricing via the NCE to more licenses, including Windows 365 and Office 365. In January 2022, they launched the changes, encouraging commercial users to adopt the new structure early on. They offered several incentives and promotions to encourage early adoption.
As of October 2022, NCE is officially the only way for commercial users to purchase many Microsoft licenses. We can expect Microsoft to eventually apply this seat-based pricing structure to all of its licenses.
What does this change mean for small businesses?
Microsoft’s NCE plan will only affect commercial businesses. At this time, government and nonprofit organizations will not be affected by this plan. So if you own a business, you will have to purchase most Microsoft licenses under the NCE structure. As mentioned before, this means that you will be paying based on how many seats you need for employees to use Microsoft programs and applications.
The recent NCE changes apply to the services listed below. So if your business uses any of these applications, the new pricing structure will affect you.
- Microsoft Business Basic
- Microsoft 365 Business Premium
- Office 365 E1, E3, and E5
- Microsoft 365 E3
Change in general is hard and oftentimes unwelcome. However, this new structure is intended to benefit companies by providing more flexibility and cost savings. Additionally, it will streamline the licensing process, resulting in simplicity for businesses using Microsoft’s platforms.
Microsoft New Commerce Experience Subscription Options
Microsoft offers three different subscription options for NCE, with varying degrees of flexibility and cost-savings. Companies can upgrade their subscriptions at any time, but they cannot move to a lower subscription until the end of their current plan. Learn about each one below.
The monthly subscription option is the most flexible and the most expensive, costing 20% more than the other two subscription options. However, companies that anticipate needing to adjust their licenses and seat counts frequently will benefit from monthly, rather than annual or longer, commitments.
Note: For Windows 365, the monthly subscription is the only option currently offered. The good news is that companies will not pay the 20% premium for this monthly subscription.
The annual subscription plan allows you to lock in licensing pricing for a full year, with the possibility of increasing your seat count if needed. You cannot, however, decrease your seat count during the 12-month commitment. With the annual subscription, you can choose to pay monthly or annually. There is no discount on annual payments.
The 36-month subscription allows you to lock in licensing pricing for three years. Like the annual subscription, you can increase seat counts during this timeframe, but you cannot decrease them. This is a great option for companies who are confident in their seat count and don’t anticipate it changing much over several years. This can save money by avoiding annual price increases. You can pay monthly, annually, or fully upfront.
All subscription options come with a 72-hour window to change plans before being locked in.
If you have any questions about Microsoft’s NCE changes, please don’t hesitate to contact our team. We are here to answer your questions, walk you through your options, and offer guidance on what subscription and license options make the most sense for your small business. We work with businesses in Winchester, VA and the surrounding areas and would love to work with yours as well.
About Cardinal Technology Solutions, Inc.
Cardinal Technology Solutions is a veteran-owned, small business that has earned the reputation as the go-to provider of IT services for Winchester, Virginia, and the surrounding areas. We specialize in network security, network support, change management, and more.