Get to know more about Microsoft licensing changes

Microsoft New Commerce Experience is an updated method for back-end billing and ordering which unifies the way customers transact Microsoft cloud services and licensing. At the heart of it, Microsoft has introduced NCE as a single, universal back end for all transactions across its complete set of offerings, and for all customers. Simplification and standardization is the overriding goal behind NCE, with this one platform sitting behind solutions including Microsoft 365, Azure, Dynamics 365, the Power Platform, and Windows 365. 

While NCE is relatively new for seat-based solutions such as Microsoft Office 365, it’s not untested and was first introduced into Azure back in 2019. From July 1 2022, migrating to NCE has become compulsory for all renewals as Microsoft phases out previous licensing models and it may well impact how, when, and what you pay for your Microsoft solutions. 

As you might expect, with NCE replacing a multiplicity of previous licensing and transacting models, the effects of the platform change on various customers is uneven: for some, it will improve matters from a financial and flexibility perspective. Other customers might see the opposite happen and they may pay more or have changes to their contract periods. Yet others won’t see any change at all. 

What changes: Simplification 

Essentially, under NCE Microsoft has boiled down licensing subscriptions into three-term options: 

• Monthly 
• Annual 
• 3-yearly 

The ‘pluses and minuses’ of these nice and simple terms are easily unpacked when looking at the pricing. 

A monthly subscription offers the greatest flexibility, but convenience comes at a premium – it is 20% more expensive than the 12 and 36-month terms. However, the number of licenses in use by customers can change up or down month-to-month. This is the most flexible option as you cannot reduce the number of licenses monthly on the other terms. 

With the annual (12-months) term commitment, you’re in for a predictable annual amount, and can pay monthly or upfront. You can add licenses during the term – but can only remove licenses at the end of the term. Flexibility is therefore limited. Pricing is locked in for the year once you’re signed up. 

For those who don’t need flexibility and have stable businesses, the 3-yearly (36-months) commitment has the advantage of locked-in pricing for three years. Choose monthly, annual or upfront payment; again, licenses can be added during the term, but not removed. 

Renewal and cancellation 

There are minor changes to renewal and cancellation under NCE: instead of the standard ‘auto renew’, you can choose a manual option. Existing subscribers must select a term for renewal, given the three options now available. And as for cancellations, there are 7 days in which you can reduce or cancel before your contract terms are locked in for the selected period. 

We’re here to help! 

We understand that licensing changes can be daunting. If there is anything unclear, confusing or which requires further explanation, please do get in touch! We’re here to help and that includes navigating the Microsoft ecosystem and selecting the solutions, technologies and licensing which works best you’re your organization. Moving to NCE is a change, but we believe simplicity and certainty in software licensing is a positive development – and we’ll help you make the most of it.