Microsoft recently announced some significant overhauls to the way its business users purchase their Microsoft 365 licenses. These changes are called the “New Commerce Experience” (NCE).  

Here are some of your most pressing questions about NCE, answered. 

What are the major changes?  

NCE introduces two options of per-seat based licensing the new purchasing options are: 

NCE short-term commitment: Monthly Subscription 

• This option provides a monthly term, allowing the number of seats to be increased, decreased, or cancelled – each month – with only a month-to-month commitment required. 
• Monthly subscriptions will incur a 20% premium, in recognition of the flexibility offered. 
• Under this option, customers can cancel with only 30 days’ notice. Customers can also increase or reduce the number of seats purchased at the end of each month, to meet changing business requirements. 
• Price increases are not protected and will increase in line with any price changes made by Microsoft. 
• There is a 7-day cancellation window is available for new purchases. 

NCE Long-term commitment: 12 Month subscriptions 

• By committing to a 12-month term, customers receive protection from cost increases for the full 12 months. 
• The subscription can only be cancelled within the first 7 days (with pro-rated billing). From this point, customers cannot cancel and will be committed to the full 12 months. 
• Decreases to the number of seats purchased can’t be made within this period, but seats can be increased with pro-rated billing. 

• Subscriptions can only be terminated after each 12-month term.

Switching Partners:   

Customers cannot move between partners until the end of NCE term.  For example:   If they are on a annual subscription they cannot move partners till the end of the annual term. 

How do I transition to NCE? 

Options: 

When transferring to NCE you have 3 options: 

Option 1: Annual Subscription 

Look at your company structure to determine the number of set users you will need throughout the entire year. Once the annual subscription is finalized, customers will be able to purchase additional licenses at a later date, but will NOT be able to decrease licenses until the annual contract is up for renewal. 

Option 2: Monthly Subscription 

Your can keep the same monthly subscription model you currently have, which includes the option to increase or decrease users each month. This option comes at a premium license cost which is 20% higher than the annual licenses. 

Option 3: Hybrid Subscription 

This option allows you to purchase licenses at both the annual and monthly subscription. Lock in a lower rate for those users you know you’ll need for the entire year and have the flexibility to add or remove users who won’t need access to your systems long-term. This is an ideal choice if you have an increase or decrease in users for a short period of time. 

For example:  You have 40 staff, approximately 5 users will fluctuate throughout the year. 

Purchase 40 x annual subscriptions and 5 x monthly subscriptions. 

Once you have decided on the best makeup of licenses you will need to get in touch with IT Confidence to migrate these for you.  Remembering that all existing licenses need to be transferred into NCE BEFORE end December 2022