Microsoft has been making lots of changes recently – take their Windows 11 upgrade, for example. With remote work more common, and the overall shift in the past couple of years on how we work, Microsoft continues to make changes to their programs to adapt to these shifts. This includes their cloud services offerings – enter the New Commerce Experience (NCE).
What’s different about the New Commerce Experience?
Microsoft’s NCE is a multi-phase, long-term change to their cloud service program, aimed at simplifying licensing, and addressing how customers prefer to purchase. Microsoft initially added the New Commerce Experience for Microsoft Azure in 2019, and in October of 2021 is including seat-based offers in the cloud for Microsoft 365, Dynamics 365, Windows 365 and Power Platform. Beginning March 1, 2022, Microsoft will be implementing a price increase for Microsoft 365. Agreements can be monthly, annual or multi-year for these cloud services.
What changes are being made to Microsoft 355?
There are two major changes happening with Microsoft 365:
- Microsoft is requiring all Microsoft 365 subscriptions to be purchased through their New Commerce Experience (NCE) platform.
- Many product lines will experience a price increase and subscription terms will be enforced.
Why is Microsoft making these changes?
Microsoft is making this change to try and predict growth and spend better, and to simplify the cloud subscription process. This is also the first significant price increase in over a decade made to these product lines and reflects the value of innovation that’s been added over the years.
Who is affected?
All Microsoft subscriptions for Office 365 and Microsoft 365. The price changes noted below will go into effect on March 1, 2022:
- Office 365 E1: $10 (from $8)
- Office 365 E3: $23 (from $20)
- Office 365 E5: $38 (from $35)
- Microsoft 365 E3: $36 (from $32)
Small & medium sized business:
- Microsoft 365 Business Basic: $6 (from $5)
- Microsoft 365 Business Premium: $22 (from $20)
*All of the above are priced per user and reflect an annual commitment.
Month-to-month subscriptions will experience at 20% premium over the above noted prices. For example, if you currently pay $20 per user, per month for Microsoft 365 Business Premium, beginning March 1, the standard price will increase to $22 per user for annual subscriptions. If you choose a month-to-month subscription, the monthly price per user will increase to $22 + 20% = $26.40.
The following are excluded from the above changes:
- Nonprofit, Government, and Education industries are not affected by these changes.
- Price changes do not affect Microsoft 365 E5, Business Standard, or Frontline (F1 or F3) SKUs.
Important dates and details from Microsoft themselves to note:
- Through February 28, 2022 – Deadline to lock in your current pricing for an annual commitment. (Promotion offered by Microsoft)
- March 1, 2022 – The above pricing increases go into effect for existing subscriptions.
- March 1 – March 31, 2022 – 5% discount on annual commitment. (Promotion offered by Microsoft)
- March 10, 2022 – New subscriptions must be purchased under NCE.
- There is discounted pricing on annual agreements and on multi-year agreements.
- There is a 20% fee for monthly subscriptions on top of the 15% price increase.
- Windows 365 SKUs will only be available in the monthly term agreement option but will not incur the 20% premium.
- Annual agreements can be paid upfront or on a monthly basis.
What Does this Mean for Your Business?
- You need a new Microsoft 365 subscription purchased through NCE. Use the above information to start planning what this will look like for your business so your operations continue to run smoothly.
- Consider your needs. In some cases for seasonal employees, it may make sense to have annual licenses, and month to month licenses of the same type.
- As noted above, Microsoft has customer incentives to utilize the New Commerce Experience early, which locks in prior prices. So, you can avoid the 15% price increase if you know your cloud needs now.
While prices may be going up, scalability of cloud options is also increasing. The purpose of the New Commerce Experience is for Microsoft cloud offerings to be available in a way that makes the most sense for customers.
If you want help reviewing your options, reach out to NetGain Technologies and we can discuss your needs, provide you with the best options possible and get you locked into the best pricing before certain deadlines occur.
This article was originally published in October 2021 and has since been updated in February 2022 to account for new information provided by Microsoft.