25 May What does the Microsoft New Customer Experience (NCE) mean for you?
Microsoft is changing the way businesses subscribe to Microsoft 365 (MS365) services and with it the pricing structure for most subscriptions. MS365 subscriptions will become standardised across the various purchasing channels via the New Customer Experience (NCE) and are intended to allow more flexibility in how customers plan their financial commitments.
Choices can be made depending on what best suits your business, whether that is a flexible payment for monthly changes or better fixed long-term planning and revenue predictability.
In practical terms, this means that businesses who want to fix payments upfront for 12 or 36 months can do so without the uncertainty of additional price rises. Whereas those who want the flexibility to add and remove licenses monthly can continue to enjoy this benefit but will see an increase in monthly premium for this.
What is NCE?
The Microsoft New Customer Experience (NCE) is the new platform to enable users to add and remove licenses to their subscriptions. This brings new pricing and commitment terms options available to customers depending on the flexibility or predictability of pricing that is required. Microsoft has added lots of functionality to its Office suite over the past couple of years, in particular, the vast collaborative functionality Teams brings and improvements to security with Business Premium.
Three main offerings will be available through these changes which are outlined below:
Monthly Microsoft 365 Subscription
This subscription brings the most flexibility and is likely to be the most popular in an ever-changing work landscape. Customers on this subscription are on a rolling 1-month contract so can reduce or extend their license with only a month’s notice in terms of numbers or functionality.
There is however no price protection at this level so the cost may fluctuate. Billing is at the start of the month for all customers.
The flexibility this offers comes with a 20% premium in price.
Although this flexibility comes with a price increase, it allows companies to change their licenses should they be needed as there’s no long-term contract. This is useful if staff levels are liable to change.
Annual 12-Month Microsoft 365 Subscription
This provides an opportunity to commit to a 12-month license at a guaranteed price but in most cases requires upfront payment.
This allows businesses to budget better for the year, but no downgrades can be made to license numbers or levels whilst in the term. Increases can be made within this term if required. License costs are discounted compared to the flexible monthly subscription.
36 Month Microsoft 365 Subscription
For even greater advanced future planning, it will be possible to purchase a 3-year license option. Payment will be required upfront for this and like the 12-month option, it will be possible to increase but not decrease the license count and functionality. License costs are discounted compared to the flexible monthly subscription.
Important Additional Information
- Customers will have a longer period of time than currently to cancel or make changes to licenses after a change as this has now increased to 7 days. For example, should a license be bought for a new starter who doesn’t stay with the company, it can be cancelled without a financial tie in within this period. This has increased from 72 hours with the previous licensing model.
- It will be possible to upgrade your license option or numbers at any time but not downgrade within the tie in period.
- It will be possible for customers or partners to change the channel through which they purchase licenses only outside of their subscription term renewal.
In addition to rolling out NCE subscription changes, Microsoft is increasing the prices for the following licenses from March 2022:
- Microsoft Business Basic
- Microsoft 365 Business Premium
- Office 365 E1
- Office 365 E3
- Office 365 E5
- Microsoft 365 E3
Additional Information
It is possible to have a hybrid approach to licensing which some businesses may find useful to both predict/set costs whilst allowing a degree of flexibility.
For example, if you know you will need at least 50 Business Premium licenses for your employees but there may be fluctuations in numbers above this, you could purchase a 50 seat license at an annual rate, thereby saving money overall, and subscribe to any additional seats on a rolling monthly basis.
All customer subscriptions that renew after 1st October 2022 will automatically be moved onto NCE subscriptions via any channel.
Currently, Nonprofit, Education and Government licenses will not be moved onto NCE so will not be affected by subscription, billing date and price changes above.
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