On March 1st, 2022, Microsoft will be implementing its new pricing model, The New Commerce Experience (NCE). Right now, your licenses are purchased and managed through Microsoft’s Cloud Solution Provider (CSP) Program. Microsoft has launched the NCE to reduce complexity and provide cost savings for long-term commitments.
How Does This Impact You:
Microsoft is increasing their pricing and annual commitments are required to avoid additional month-to-month surcharges.
License Price Increases
The following price changes will take effect on March 1, 2022:
- Office 365 E1 now $10 (up from $8, a 25% increase)
- Office 365 E3 now $23 (up from $20, a 15% increase)
- Office 365 E5 now $38 (up from $35, an 8.6% increase)
- Microsoft 365 Business Basic now $6 (up from $5, a 20% increase)
- Microsoft 365 Business Standard still $12.50 (NO CHANGE)
- Microsoft 365 Business Premium now $22 (up from $20, a 10% increase)
- Microsoft 365 E3 now $36 (up from $32, a 12.5 % increase)
- Microsoft 365 E5 still $57 (NO CHANGE)
Microsoft is offering a 5% discount for annual Microsoft 365 commitments. The annual discount will be available until the end of March 2022. Committing to your licenses before the end of March 2022 will not only allow you to benefit from the discount but also avoid the price increase for 1 or 3 years.
Other Microsoft 365 licensing not listed here will not be seeing a price increase at this time.
- March 2022: Price Increase Across Microsoft O365 licenses go into effect. All net-new subscriptions must be on NCE by March 2022.
- October 2022: Existing legacy CSP subscriptions can be renewed through October 2022.
- July 2023: All CSP subscriptions must move to NCE because they cannot be renewed on CSP experience.
Purchasing Options for NCE:
*3 year SKUs estimated to be available in March 2022
- Each license can be ordered as a month-to-month contract, 1-year term, or 3-year term
- This term choice is per license, even for licenses for the exact same product. You can “mix and match.”
- Seasonal workers, interns, and similar may be desirable as month-to-month.
- Monthly term options are at a 20% price premium
- 1-year term payment options: upfront or monthly payments
- 3-year term payment options: upfront, annual, or monthly payments
- Cancellation period is now 3 calendar days, including the day of purchase. There will be a full refund issued if canceled on day 1, and a pro-rated refund if canceled on days 2 and 3.
- Windows 365 subscriptions will only be available via the monthly term offer on NCE. Windows 365 subscriptions will not be subject to the 20% premium for monthly terms at this time.
- Nonprofit and education licenses will not be seeing a price increase at this time.
What to do if you are impacted
If you utilize Five Nines for procuring your Microsoft licensing, please reach out to your Primary Engineer and/or Account Manager to discuss if you will experience pricing changes, if you have questions on the new terms, or need more information on the NCE and price changes from Microsoft.
Q: When will I see the billing changes on my invoice from Microsoft?
A: You will see pricing changes on your 3/1/2022 invoice.
Q: With the NCE for seat-based subscriptions, when a customer purchases an annual term subscription from Partner A (MSP A), are they allowed to move that subscription to Partner B (MSP B) within the year term? Or are they locked in with Partner A (MSP A) until the end of the year?
A: Moving subscriptions between partners is not supported in the NCE. Due to the cancellation policy, the customer is committed to paying Partner A (MSP A) for the full term.
Q: If I have an employee quit and we are on an annual subscription, can I decrease that seat mid-term and stop paying for the license?
A: You can only cancel seats within the first 72 hours of purchasing the subscription for the NCE annual and monthly terms (for both initial purchase or renewal). You will continue to pay for that seat until the term is complete (monthly, 12 months, or 36 months).
Q: Can we schedule changes (SKU upgrade/downgrade, seat quantity, billing frequency, term) at renewal?
A: Yes. While CSP (Legacy) experience did not allow this, the NCE allows you to make scheduled changes at the time of renewal.
Q: Can we make mid-term changes (SKU downgrade, seat quantity, billing frequency, term) ?
A: No. You can not make changes until it is time to renew.
Q: Are upgrades available mid-term?
A: Yes. You can upgrade mid-term.
Q: Do we have to move to the NCE?
A: Yes. By July 2023, all organizations will be required to leave the legacy CSP and move to NCE.