Change is coming…
The changes affect Microsoft’s licensing model for:
- Microsoft 365
- Windows 365
- Dynamics 365
- Power Platform
Currently there are multiple purchasing avenues, which have their own terms & conditions and contracts. Microsoft is now moving to a single connected platform and updating their pricing.
In this connected platform, customers will only need to sign one single agreement – the Microsoft Customer Agreement – which will contain terms and agreements that will scale as you buy. This is currently being branded as their “New Commerce Experience”. If you wish to see the Microsoft Customer Agreement you can find it here.
The New Commerce Experience offers are available now, alongside your current licenses. In March 2022 you will no longer be able to purchase in the same manner as you can now for M365, W365, D365 or Power Platform. (Note: any annual purchases made prior to March 2022 will continue for the term of the original purchase).
In March 2022 there will be a price rise for Microsoft 365 products. This is the first major price increase to Microsoft 365 since its launch. In that period Microsoft 365 has grown, adding several new applications to the original Office Suite. On average, the increase is +15% (depending on the SKU) however we can provide more detailed pricing for the specific licenses you would like information on.
For current subscriptions, Microsoft has extended the period during which subscriptions can be renewed on the existing platform to June 30, 2022 (instead of March 10, 2022).
This extension gives customers three more months before all subscriptions must be renewed in the New Commerce Experience.
There is a launch discount for customers who purchase prior to March 2022. For an annual subscription this is a 5% discount on the annual price. For a monthly subscription this is 5% until the end of June 2022.
We will be in touch with our clients directly prior to March 2022, but if you would like to get started now, just let us know.
Benefits of the New Commerce Experience (NCE)
- Billing will be aligned to calendar month
- Conversion of trial to paid offer is now available for NCE
- New communications offers – for example overage for Teams Calling plan. If a user runs out of minutes, rather than being cut off they can now be billed through an overage mechanism called Communications Credits
- Multi-geo capabilities – this allows you to create a replica of local data and move it to the users’ local data centre. For example, if a company is in the UK but has users in Australia, they will store local users locally so there is no lag
- Launch promotion – the new discount on the annual subscription (see above)
- Audio conferencing will be made free of charge. It is currently running for free until the end of December but Microsoft plans to add unlimited dial-in capabilities for Microsoft Teams meetings across the Enterprise, Business, Frontline, and Government suites in the near future.
Important changes to be aware of
When you buy a subscription today you are actually buying an annual subscription, but Microsoft have never enforced a cancellation policy before. So, it is currently easy to bring the user count up and down or put licenses on hold with no penalties.
With NCE, Microsoft will be enforcing a cancellation policy for all licenses and subscriptions. Under the new model:
- The annual term subscriptions are discounted in price in comparison to monthly subscriptions. However once purchased there is a commitment for 12 months. An annual term subscription can be cancelled in the first 72 hours but not after that.
- For those who prefer, there is a new monthly term offer. However, this flexibility will incur a 20% price premium.
With the annual pricing you cannot cancel a license after the first 72 hours however your rights to re-assign the license remain. See here for terms.
As monthly billing is per Calendar Month, if you start a subscription in the middle of the month, for that month you will only be billed for the number of days it is in place up to the end of the month. Then from the following month all billing will be for a whole calendar month.
Please note, this information is subject to change as Microsoft may change dates or amounts.
We will continue to keep you up to date in relation to any changes introduced by Microsoft.
Now may be the time to consider which licenses you would like on an annual plan and which you think should be monthly.