For 10 years, customers have been able to consume Microsoft 365 licenses as a pay-as-you-go model and had the agility to add, remove upgrade or downgrade licenses without any penalties. Microsoft 365 license prices were static over the last decade and while partners and consumers hadn’t experienced any major price shifts, hundreds of new features were added across the platform such as Teams, Yammer, Delve, voice (calling), on top of many application add-ons included with the premium packages. Now, in their efforts to reduce licensing complexity and costs, Microsoft is changing its pay-as-you-go license tiers to include committed-based annual, multiyear pricing, and higher pay-as-you-go monthly pricing.
What is Microsoft New Commerce Experience (NCE)?
Microsoft on NCE said, “…intent was to provide customers more choice and flexibility in how and where they purchase while giving our partners more opportunities to sell to a growing base of existing and new customers.” Microsoft NCE page.
New Commerce Experience (NCE) is a program that now exists in Azure, Microsoft 365, Dynamics 365, Windows 365, and Power Platform. With NCE, Microsoft offers annual (committed) subscriptions as default and an optional monthly (non-committed) subscription.
Aside from the mandatory price increases, annual committed subscriptions can be sold at the same price as the non-committed licenses under the previous monthly price models for legacy CSP SKUs, but cannot be canceled or downsized. Monthly (non-committed) subscriptions will be sold at a premium over the annual subscription price but offer flexibility to scale up / down or cancel.
What timeline is New Commerce Experience on?
This mandatory price change is affecting all Microsoft customers and partners worldwide. Microsoft has announced the change in October 2021. Partners and customers should be aware of the price changes for monthly vs. annual subscriptions that will be enforced by March 10, 2022.
So why now, why New Commerce Experience (NCE)?
Predictable revenue models are not something new in the cloud. Microsoft Azure and other hyperscalers have operated under the NCE model for the last 5 years. The concept here is pretty simple:
||Commitment for Resources
Better pricing is based on making a revenue commitment to Microsoft. Managed service providers now need to have discussions with customers and partners about understanding what portion of their workloads can belong in a committed revenue bucket at a lower price versus the tradeoff for agility and growth against their business.
Get NCE-Ready with RapidScale
RapidScale is committed to providing the best experience for our customers and partners. Ready to transact in NCE today, RapidScale developed Microsoft APIs to automate price books against NCE and provides a consultative sales approach for partners.
RapidScale is a Microsoft Gold Partner and part of an elite group of MSPs that are NCE-ready. Transacting on an annual (committed) basis for years, RapidScale can offer a differentiated Microsoft 365 solution to our partners and their customers. This new change is complex, with many options to consider. RapidScale’s cloud solutions consultants are equipped and ready to help partners and customers navigate through this change, supporting you in making informed decisions for you and your business.
Want to learn more? Here are some links to resources for RapidScale’s New Commerce Experience readiness below: