New Commerce Experience – Licensing Model and Pricing

Over the course of the next few months, Microsoft will be making changes to both its licensing model, as well as pricing changes. 
As we strive to keep our customers updated with the most important information, we feel now is the perfect time to break this down to you. At Redpalm, we’ve split the below into two sections (price increases and licence changes).

Price Increases

From 1st March 2022, Microsoft is raising the pricing of 6 of their most popular products in the market. This will affect you at different times, based on if you are currently utilising these services or not.
This is Microsoft’s first price increase in over 5 years. As stated above, this is a change by Microsoft, and therefore is something out of our control. The main 6 products affected by the change, as well as the current estimated price increase is below. Pricing in pound sterling will be made available at the start of February 2022:

• Office 365 Business Basic – 20%
• Office 365 Business Premium – 10%
• Office 365 E1 – 25%
• Office 365 E3 – 15%
• Office 365 E5 – 8.5%
• Microsoft 365 E3 – 12.5%

We will be contacting you in due course to inform you of when these price increases will affect you. If you’re already purchasing one of these products from us, then your pricing will stay the same until an anniversary date, which is based on when you first ordered the service.
If you’re looking at purchasing one of the above products in the near future, please speak to our sales team / your account manager so we can work together to find the most suitable path for you.

Licence Changes

Microsoft has recently announced a change in how customers purchase and manage their licences through their Cloud Solution Provider (CSP) Program, which is the platform you are currently buying your license through.
On 10th January 2022, Microsoft is launching New Commerce Experience (NCE). This change will impact the way you purchase Microsoft 365 licences, with Microsoft’s intention to provide cost savings for long term commitments, whilst introducing additional features over the course of the year.
With the launch of NCE, Microsoft will be introducing additional ways of purchasing your office 365 services (alongside that of monthly rolling). These options will be 12-month and 36-month commitments (36 month coming later in the year), allowing you to save on any future cost increase by committing to the coming years.
With these changes, however, comes some differences on how you can change your licence quantities, which is explained below:

Monthly Option

You will be able to make changes to your licences in a 72-hour window once per month. This option is the most flexible on the New Commerce Platform, but will come at a price premium if you do not wish to commit for a long term.
Seat additions can take place at any time, so you can add to your agreement like normal, however reductions can only happen in that 72-hour window monthly. Not all services are available on this model, so it’s worth checking with us before deciding on any agreement path.

Annual Option

You will be able to make changes to your licences in a 72-hour window once a year. This option is less flexible than the above, but is not subject to the price premium and therefore is cheaper than its monthly counterpart. Licence additions are also the same as monthly.
Payment for this option can either be on a monthly basis (with a year commitment) or upfront.

Multi-Year Option (Launching Mid 2022)

You will be able to make changes to your licences in a 72-hour window at the end of your 36-month term. This option is the least flexible, but is not subject to the price premium and therefore is cheaper than its monthly counterpart. Licence additions are also the same as monthly.
Payment for this option can either be on a monthly, annually or upfront basis.

What Do We Advise Next?

As always, the team at Redpalm are here to support you with all Microsoft changes, and pride ourselves on the service we offer. We have been researching the best options for our customers since the New Commerce Experience launch and we believe it’s in your best interest to look at moving to the NCE where available, and leveraging the discounts when possible.
To go with this, the NCE is the best time for us to audit your estate and make sure you’re not over paying for the licences you’re currently using. We can combine this with a discussion around when it is best to move over to the new offering, and also make sure that the move is as seamless as possible.
To find out more, give us a call on 0333 006 3366 today!