Microsoft has announced some major changes to its product licensing and pricing with the Microsoft New Commerce Experience.
These changes are being implemented globally and will impact every Microsoft customer, except for non-profit and educational institutions.
We’ve outlined some Frequently Asked Questions to help you navigate these changes and make the decision that works best for your business.
What is the Microsoft New Commerce Experience?
Microsoft has implemented the NCE to simplify the purchasing journey for customers in order to transact a consistent and standardized purchase timeline. New Commerce Experience is transitioning subscriptions like Office 365, Microsoft 365, Dynamics 365, Windows 365, Power Platform, and more to the same purchase timeline.
When does the new pricing & licensing model go into effect?
Starting March 1st, 2022, new purchases or additions to your licensing will be at the new pricing. Prices will increase across most SKU’s by 4%-35%.
By July 1st, 2022, any renewal of existing licenses will be at the new pricing.
Which customers are impacted by the new pricing/licensing model?
The New Commerce Experience applies to all commercial customers, excluding non-profit organizations and educational institutions.
When do I need to lock in the legacy rates to retain the old pricing?
Rates must be locked in by February 28th, 2022. Contact SysGen to lock in your legacy rates.
How long can I continue paying the legacy rates?
The rates will be honored until February 28th, 2023. At that point, your business will need to transfer to the new pricing.
How much is pricing increasing?
License prices will increase by up to 25% across subscription plans and product SKUs. There is an ADDITIONAL 20% premium for any client choosing to remain on the month-to-month pricing plan.
What products are affected by this price increase?
- Microsoft 365 Business Basic
- Microsoft 365 Business
- Premium Office 365 E1
- Office 365 E3
- Office 365 E5
- Microsoft 365
- Microsoft SKUs
These increases will apply globally with local market adjustments for certain regions. There are no changes to pricing for education or non-profits at this time.
Why is this happening?
From the Microsoft website: “Since its launch a decade ago, Office 365 has grown to over 300 million commercial paid seats. Along the way, we have continuously re-invested to meet the changing needs of our customers. Four years ago, we introduced Microsoft 365 to bring together the best of Office, Windows, and Enterprise Mobility and Security (EMS). That same year we added Microsoft Teams as the only integrated solution where you can meet, chat, call, collaborate, and automate business processes—right in the flow of work.
In fact, since introducing Microsoft 365 we have added 24 apps to the suites—Microsoft Teams, Power Apps, Power BI, Power Automate, Stream, Planner, Visio, OneDrive, Yammer, and Whiteboard—and have released over 1,400 new features and capabilities in three key areas.”
What are the major changes I’ll experience on the NCE?
– Clients who want a month-to-month contract will pay a premium of 20%
– Clients who wish to subscribe to the current price commit to a number of licenses for a 12-month term
– License decreases can ONLY be made at the end of your 12-month term. With the 12-month term, seat adjustments can be increased as required.
– Licenses can only be downgraded at the end of the 12-month term. Office 365 E3 to Microsoft 365 Business
– Clients can only change resellers at the end of the annual term (annual subscriptions)
Which license combination will work best for my business?
Please speak to your SysGen representative to discuss the option that will work best for your business. Each business has different business cycles and licensing needs.
