2022 Brings Exciting Changes to Microsoft’s New Commerce Experience (NCE)

January 2022 saw the phase two launch of Microsoft’s highly anticipated New Commerce Experience (NCE). With the approach of phase three Microsoft is now empowering businesses to lock in savings for 1-year and 3-year terms while still offering the option of a month-to-month pay flexibility. Microsoft is retaining the end user’s ability to have some subscription plans on a more flexible licensing term, however, this forfeits the cost savings the annual plans provide.

Microsoft’s Timeline to Success

Microsoft Timeline to Success outline2

How Does this Affect Microsoft 365 Subscribers?

The most noticeable changes with the CSP are the new cancellation terms. Depending on the needs of any given business, the important factors to watch out for will be how often licenses are scaled back. 

For businesses that have temporary and seasonal staff with the use of Microsoft 365 licensed products, it’s going to be imperative to keep costs down by staying with the Monthly Subscription plan. With flexibility comes a slightly higher price point. The Monthly Subscription plan allows businesses to continue adding and reducing licenses as needed to meet business needs. 

While some businesses will see a rise and fall in their license count, many have a set of static positions or associates within their organization. These license types will benefit from cost savings through the 12-Month and 36-Month Subscription plans. Locking in rates with these lengthier options can help shield businesses from any additional rate increases that could be passed down from Microsoft.

See the chart below for a more in-depth view of each subscription model.

Monthly Subscription Chart outline

Please note the biggest changes:

  • Cancellations: Should you choose to move to the 12-month or 36-month subscription models, you will no longer be able to remove licenses. You will be able to continue adding licenses throughout the year. There is also a 72-hour cancellation window at the time of renewal.
  • 1-Month Subscriptions: As of 2/4/2022, Microsoft’s pricing model is showing there could be up to a 40% price fluctuation for month-to-month plans.

Microsoft 365 Price Changes

Not only are the terms changing for each of the license types, but the pricing model is also being adjusted by Microsoft at this time. 

See the fee schedule changes per license type below.

Microsoft 365 Prices outline

Microsoft is issuing a price increase for annual subscriptions as well as an additional premium pricing for subscriptions that retain the ability to decrease license counts from month to month.

ERGOS customers can rest assured that we will maintain management of these subscriptions as well as provide consultation for any questions and concerns.

  • For subscriptions renewing before 7/1/2022, we can lock in the legacy rates. Microsoft will not discontinue their legacy rates (what you’re currently paying) until July of 2023.
  • For subscriptions that renew after 7/1/2022, a decision will need to be made by each company which subscription plan is the best fit. Contact your dedicated response team for detailed information on what the right options are for your business at this time.
  • ERGOS customers can also be assured our staff is working diligently over the next few months to make sure all subscriptions and subscribers are contacted for a plan of action.
  • In the event a decision is not made, or we are unable to contact you, your services will not face a period of interruption. ERGOS will move your subscription(s) to the NCE at the time of their renewal under the monthly subscription plan allowing you to decide which subscription model you would like to be in while keeping your services up and running.

Successfully Navigating Microsoft 365 Changes

Dealing with rate increases for any productivity product in use by a company is never a wanted conversation by decision makers. It’s important to remember that so far, Microsoft has not released rate increases in about 10 years. 

It’s also worth noting that returning to years gone by standards of in-house mail servers should remain a thing of the past. In our ever-changing climate of work from home and remote workforces, keeping access to productivity products from anywhere should be well maintained as a high priority for every business.

Staying successful in keeping these products both functional and economical can be tackled through different ways that would be tailored to each business type. By segregating the workforce into buckets of positions that are seasonal or temporary from those that are year-round positions, companies can position themselves for success while taking advantage of the rate lock-ins.

Ask your team these questions:

  • Do we have any temporary or seasonal positions we would not want to commit to paying an entire year for?
  • How many of our current users would need to be replaced within 1-3 months and would benefit from an annual subscription?

Defining which of your users can be placed into the 1-Month Subscription Model at the slightly higher price premium can guarantee you the flexibility to increase and decrease your monthly subscriptions as needed. At this time, Microsoft has not issued any information alluding to penalties for taking a subscription to zero if needed. All other user licenses, even if there is some turnover throughout the organization, would benefit from annual licenses where the rates could be locked in for longer terms. It would even be prudent to take advantage of the 36-Month Subscription model for executive and management roles for further cost savings across the years. At this time, Microsoft has only released a pricing model for Microsoft Dynamics for the 36-month subscription, however, they have stated there will be 36-month options in the near future for all other Microsoft license types.

How ERGOS can Assist your Microsoft Licensing Success

ERGOS is a premium Cloud Solution Provider (CSP) with Microsoft. Our wealth of knowledge and commitment to astounding customer service can help any business of any size navigate and properly select the correct Microsoft 365 licensing plan. ERGOS also makes navigating Microsoft’s often confusing billing model a breeze by consolidating and tracking changes set forth by Microsoft. If you have further questions or concerns, simply fill out our contact form. ERGOS is in the business of being your strategic IT partner.