Decisions, Decisions: Microsoft’s New Licensing

Starting in January 2022, Microsoft is rolling out three significant changes to their cloud per-seat licensing, like Microsoft 365 and Dynamics 365. 

There is a temporary discount for licenses before March, a considerable price increase in March, and a new subscription model, New Commerce Experience (NCE), with vastly different payment and cancellation terms. There is a way you can delay price increases for 12 months and save 5% of the total cost. 

We will provide you with important dates from Microsoft to avoid costly penalties as you move to their new licensing format. Let’s discuss updated NCE information and cover your options for the smoothest transition.

Choosing the right plan

The main takeaway is how crucial it is to plan well to ensure you have the most cost-effective and beneficial plan for licensing in 2022. 

We have now received the final word on some of the program features. We encourage you to evaluate your Microsoft License options and make decisions before the end of February to ensure you have the best plans for your organization over the next year.

We recommend choosing one of two options:

If month-to-month payments and variable license counts are helpful to you: Initiate annual legacy subscriptions for all your products in February. According to information we received from Microsoft, this price will protect your subscription until the end of January 2023, when it comes up for renewal. At that time, you will have to convert to NCE, and you will also have to pay the current price for the products.

If you are comfortable with an annual payment: Initiate an NCE yearly subscription with a Tier 1 Direct reseller like TechHouse before March. You can receive a 5% discount on the subscription price, and the reseller will have access to Microsoft partner premier support for your subscription.

More Details on Microsoft’s New Licensing

Temporary Discount: Microsoft will offer a 5% discount on new annual NCE subscriptions through March 10, when all new subscriptions must be NCE.

Price Increase: Microsoft is increasing the price of its core Microsoft products by 20 percent on annual terms. For month-to-month subscription terms, there is an additional surcharge by Microsoft of 20 percent.

Detail of licensing price changes for commercial products with NCE:

  • Microsoft 365 Business Basic (from $5 to $6 per user)
  • Microsoft 365 Business Premium (from $20 to $22)
  • Office 365 E1 (from $8 to $10)
  • Office 365 E3 (from $20 to $23)
  • Office 365 E5 (from $35 to $38)
  • Microsoft 365 E3 (from $32 to $36)

NCE: The new NCE program has significantly more draconian cancellation fees. You can only cancel within the first 72 hours of the purchase transaction. Unlike the current subscription, the annual term will not reduce the quantity during the term. The monthly term has a significant surcharge.

Microsoft’s NCE Timeline

March 10, 2022: New subscriptions must be purchased in NCE
July 1, 2022: Legacy subscriptions must be renewed into NCE

Microsoft’s NCE is here, and we are thankful for the opportunity to inform and support you through the transition. We recognize the power of adapting and pivoting when change comes; therefore, our suggestion is to see what option best fits your organization’s needs and renew sooner rather than later.