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By: Brian Wells on January 25th, 2022

Microsoft NCE Changes: What Commitment Model is Right for Your Customers?

Have you heard the news about Microsoft’s New Commerce Experience (NCE) program? There are some substantial changes in store for anyone using Microsoft products!

Most of our customers today use Microsoft products, as-a-Service, on a month-to-month plan. NCE is a completely new program that makes some significant changes to the way we buy, sell, and manage Microsoft subscriptions.

Keep in mind that NCE is separate from the commercial price increases Microsoft will put into effect in March 2022 that we’ve been discussing for several months.

The NCE program aims to move Microsoft customers from month-to-month subscription plans to annual or multi-year plans (typically one or three-year commitments). Month-to-month plans are still going to be available; but, after June 1st, Microsoft will apply a 20% “premium” for customers to stay on those monthly plans.

If you would like to avoid that “premium, you may want to consider an annual subscription plan. But buyer beware – annual subscription plans now come with quite a few conditions themselves:

  • Subscription upgrades are permitted during the term of the commitment of some products
  • Downgrades are not permitted on any license during the term of the commitment
  • Quantity increases in licensing are possible during the term of the commitment
  • License decreases are not permitted during the term of the commitment
  • Annual subscriptions have automatic subscription renewal
  • No partner of record changes are allowed during the term of the commitment. A customer may not switch between Reseller A and Reseller B during the term of the commitment.
  • Contract changes must be completed within the 72-hour window of subscription renewal

Due to the restrictions of annual commitments, many MSPs and subscribers may want to remain on a month-to-month commitment. If you want or need the flexibility of adding and removing licensing as needed, month-to-month is likely still your best option. But please note, understand, and prepare your customer for the 20% “premium” that will apply to month-to-month commitments after June of 2022.

As always, please reach out to your Sales or Sales Engineering team with any questions.