They are calling it “The New Commerce Experience” (NCE). What does that mean to you? Well, in August of last year, Microsoft announced price increases across most of their Microsoft 365 license types. Their plan is to simplifying the license procurement process, aligning all offerings to the Enterprise Agreement model. These changes will come into effect in March 2022.
Although this could impact customer’s budgets, Microsoft explains that the pricing for its Office products has not changed substantially in the last 10 years, even though they’ve added many valuable features such as communication & collaboration tools, security & compliance options, plus AI & automation capabilities.
Other changes that come with this increase include NCE license quantities that can be increased but not decreased until the subscription renews, and a subscription cannot be cancelled mid-term. This is a significant change that can impact a customer’s license planning & budgeting cycles, and care should be taking prior to subscription renewals to strategize the ongoing costs.
Here are a few “need to know” details:
- New pricing increase will be around 15%
- Annual agreements will be enforced, with monthly terms getting a 20% increase over annual agreements
- The cancellation window for licenses will be reduced to 72 hours, where previously you could suspend licenses to avoid being charged.
- Charities and education licenses are unaffected by the price increases.
Per-user pricing for the following subscription licenses will increase in March 2022:
Below is the timeline of the changes:
- January 1st, 2022 – General Availability for New Commerce Experience
- March 1st, 2022 – Office 365 and Microsoft 365 price increases go into effect
- March 10th, 2022 – All new-to-the-customer licensing must be placed through NCE (New Commerce Experience)
- March 31st, 2022 – Discount pricing for annual agreements ends
- June 30th, 2022 – End of ability to renew subscriptions on existing platform
- June 30th, 2022 – Discount for monthly terms ends
- July 1st, 2022 – Can no longer renew legacy subscriptions
Here are a few things that are worth noting about the upcoming changes
- Microsoft 365 E5 pricing is not increasing
- Windows 365 is not eligible for discount pricing
- Some licensing will not have the P1M (monthly) option
- All offers will be seat based (as opposed to seller based)
- Customers can have both annual AND month-to-month agreements
Can you Keep the Current 365 Prices?
It may be possible to fix current pricing for a one- or three-year term (depending on your plan) if renewed before 1 March 2022. Monthly payments will still be an option.
We advise you to contact us to discuss how these changes might affect your current licensing arrangements and how we can help you make the most of the current pricing.
Want to learn 5 Reasons to Back Up Your Microsoft 365 Data? Check out this blog post for more information.
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