Will you be affected by Microsoft NCE?

Over the course of the next few months, Microsoft will be making changes to both its licensing model, as well as pricing changes. Due to this, we have little choice but to follow these changes ourselves, meaning there will be some important updates for you.  As your Managed IT Support Provider, we have summarised the changes for you below:

Price Increases 

From March 1st, Microsoft is raising the pricing of six of their most popular products in the market. This will affect you at different times, based on if you are currently utilising these services or not. This is Microsoft’s first price increase in over 5 years and, although not great timing, we believe that the increase in both product availability and service upgrades over this time warrant the change. As stated above, this is a change by Microsoft, and therefore is something out of our control. The main 6 products affected by the change, as well as the current estimated price increase is below:

• Office 365 Business Basic – 20% 
• Office 365 Business Standard – 10% 
• Office 365 E1 – 25% 
• Office 365 E3 – 15% 
• Office 365 E5 – 8.5% 
• Microsoft 365 E3 – 12.5% 

We will be contacting you in due course to inform you of when these price increases will affect you. If you’re already purchasing one of these products from us, then your pricing will stay the same until an anniversary date, which is based on when you first ordered the service. If you’re looking at purchasing one of the above products soon, please speak to your account manager so we can work together to find the most suitable path for you.

Licence Changes 

Microsoft has recently announced a change in how customers purchase and manage their licences through their Cloud Solution Provider (CSP) Program, which is the platform you are currently buying your licences through. On 10th January 2022, Microsoft launched its New Commerce Experience (NCE). This change will impact the way you purchase Microsoft 365 licences, with Microsoft’s intentionintension to reduce complexity and provide cost savings for long term commitments, whilst introducing additional features over the course of the year. 

Microsoft is offering a 5% discount for annual Microsoft 365 commitments. The annual discount will be available until the start of March 2022. Committing to your licence before the start of March 2022 will not only allow you to benefit from the discount, but also avoid the price increase for an extended period. 

With the launch of NCE, Microsoft will be introducing additional ways of purchasing your office 365 services (alongside that of monthly rolling). These options will be 12 and 36 month commitments (36 month coming later in the year), allowing you to save on any future cost increase by committing to the coming years. These changes will affect how you change your licences quantities, which is explained below:

Monthly Option 

You will be able to make changes to your licences in a 72 hour window once per month. This option is the most flexible on the New Commerce Platform, but will come at a price premium if you do not wish to commit for a long term. Seat additions can take place at any time, so you can add to your agreement like normal, however reductions can only happen in that 72 hour window monthly. Not all services are available on this model, so it’s worth checking with us before deciding on any agreement path. 

Annual Option

You will be able to make changes to your licences in a 72 hour window once a year. This option is less flexible than the above, but is not subject to the price premium and therefore is cheaper than its monthly counterpart. Licence additions are also the same as monthly. Payment for this option can either be monthly (with a year commit) or upfront. 

Multi-Year Option (launching mid 2022) 

You will be able to make changes to your licences in a 72 hour window at the end of your 36 month term. This option is the least flexible, but is not subject to the price premium and therefore is cheaper than its monthly counterpart. Licence additions are also the same as monthly. Payment for this option can either be on a monthly, annually or upfront basis.

What do we advise next?

As always, we are here to support you with all Microsoft changes, and pride ourselves on the service we offer. We have been researching the best options for our partners since the New Commerce Experience launched and we believe it’s in your best interests to look at moving to the NCE where available, and leveraging the discounts when possible.

To go with this, the NCE is the best time for us to audit your estate, and make sure you’re not overpaying for the licences you’re currently using. We can combine this with a discussion around when’s best to move over to the new offering, and also make sure that the move is as seamless as possible.

Do you have any questions?

The price increase is not effective until the 1st March 2022, and If you’re coming to the end of your current agreement and want to discuss the price increases, please get in touch.