Introduction
Microsoft has always been a partner-focused company – bringing unified experiences for the partners to help them deliver services to the end-consumers effortlessly. Microsoft’s Cloud Solution Provider (CSP) program is built on this vision to help simplify the purchase experience of partners and to make it easier for them to meet the ever-evolving demands of their customers.
The CSP program is continuously evolving with new procedures and policies to address the diverse needs of partners and customers and allow them to transact in a less complex manner. In November 2019, Microsoft first announced the new commerce experience for the Microsoft CSP program for Azure server subscriptions and reserved instances. Next, in the fall of 2021, Microsoft announced the expansion of the NCE to cover Microsoft 365, Power Platform, Dynamics 365, and Windows 365.
In October 2021, Microsoft moved seat-based online services to the NCE, enabling CSPs to get new sales capabilities and deliver operational efficiencies. Time was given to the partners to get operationally ready for sales, and the new commerce seat-based offers have been made generally available in January 2022.
Once again, the focus is on enhancing the purchase journey for both the partners and their customers through:
- Introduction of new offers, functionalities, and policies
- Solidifying the NCE to transform how partners sell and customers buy in the cloud.
RackNap, the cloud business automation platform for Microsoft partners, meets the new NCE guidelines. RackNap continuously and quickly upgrades as per the new Microsoft NCE updates become available to help partners transition smoothly to the NCE.
The rest of the article will answer the most pressing questions, changes, and the impact of the NCE on both partners and their customers.
What is Microsoft’s New Commerce Experience?
Transforming the way you interact with your customers
With increasing focus on remote work and business continuity, it is safe to say that the cloud adoption rate will continue to increase. Microsoft partners are uniquely positioned to help drive the cloud adoption for their end customers – both new and existing, by offering Microsoft cloud products. Microsoft’s New Commerce Experience (NCE) is designed to help partners extend the cloud benefits to their customers while simplifying the buying and selling process to grow their business and improve GTM (go-to-market) strategies.
Built on the strong foundation of the CSP program, the NCE is a multi-phase and long-term investment in the CSP program. Its goal is to:
Help partners accelerate business growth with a simplified licensing and purchase journey.
The first phase started when Microsoft introduced the NCE for Azure plans in 2019. In October 2021, Microsoft introduced seat-based offers in CSP for Microsoft 365, Dynamics 365, Windows 365, and Power Platform.
Microsoft’s New Commerce Experience in the CSP model will help partners build and deliver more managed services to their end customers and expand the existing customer base – all with a simplified licensing and purchase journey.
Read more about it on the Microsoft Partner Network Blog.
You can also watch this video by Microsoft to learn more: New commerce experience for CSP seat-based offers: Guide to the resource collection.
What does it mean for partners?
As a Microsoft partner, the new NCE will affect you in the following ways:
a) Improved sales agility and customer commitment: With new pricing benefits for annual term subscriptions, partners can lock in pricing for the entire term. New promotional pricing too will start from January 2022.
b) Operational efficiency and cost savings: Partners get improved subscription-management capabilities. Automated subscription changes at renewal, easier price list, and reconciliation file processing.
c) More choices for customers: The new monthly priced term subscription will allow easier and faster seat cancellation or reduction. It will enable easier adoption of new value-added products separately.
What does it mean for customers?
a) Value for commitment: The NCE is focused on rewarding customers for their longer-term commitments with the best pricing on annual or multi-year plans.
b) Flexible options for evolving needs: Adding new seats or reducing seats is now easier with monthly-term subscriptions, available for customers at a premium.
c) New products: The NCE also brings Windows 365 in the CSP program with free trial options available.
How NCE is different from the current CSP program?
The NCE has changed how Microsoft services are consumed and billed, as well as there are some price changes.
| Subscription Options | |||
| Monthly subscription | 12-month subscription | 36-month subscription | |
| Billing Terms | Monthly | Monthly, upfront | Monthly, annual, upfront (Generally Available: March 2022) |
| Seats | Can be increased. Decreased under the cancellation window | Can be increased only during the tenure | Can be increased only during the tenure |
| Cancellation Window | 72 hours (post which will be billed for the entire month) | 72 hours (post which will be billed for the entire year) | 72 hours (post which will be billed for the entire 36-month term) |
| Commitment | Flexible | Fixed | Fixed |
| Price Lock | 1 month | 12 months | 36 months |
| Pricing | 20% increase (premium) | Standard | Standard |
| Availability | All per-user SKUs upon GA | All per-user SKUs upon GA (except Windows 365) | Dynamics 365 – GA
Microsoft 365 (select) – March 2022 |
| Billing options | |||
| Change | Current Experience | New experience | Impact/benefits |
| Schedule Subscription renewal changes | Not available | Partners can now schedule seat counts, term-length, and SKU conversions | Allows partners to schedule changes in advance – and accelerate the renewal process. |
| Mid-term changes in billing frequency | Available | Available (monthly to yearly or 36-month) only at the end of current subscription-term | Adds more flexibility |
| Cancellation window | 30-days | Within 72 hours | Focused on creating longer-term commitments |
| Billing pause upon cancel | Yes | No | Will continue if not canceled within the stipulated window |
| Refund | Full: Within 30 days
Prorated: Yes, anytime |
Full: Within 24 hours (UTC)
Prorated: Withing 72 hours (UTC) |
In UTC |
| Auto-renewal | Yes | Partners get a toggle option – to set a service to renew manually | Allows to plan for terminated subscriptions |
| Windows 365 subscriptions | Only annual term available | Only monthly term available | Allows users to try Windows 365 with no long term commitments |
| Price list integration via APIs | Not available | Partner APIs available | Enhanced automation |
| Add-ons | Not listed as a separate option | Listed as separate options and can be purchased separately | More flexibility for both customers and partners |
Important dates to remember
As part of the transition from the CSP to the NCE model, here are a few important dates you must be aware of:
10th January 2022: The official launch of NCE and the introductory promos.
1st March 2022: New price increase will be implemented across Microsoft 365 licenses – Office 365 E1, E3, and E5. From March onwards, all new and renewing Microsoft subscriptions will happen through NCE.
1st October 2022: It will be mandatory for all customers to purchase through NCE.
How RackNap helps you prepare for the NCE
As a cloud automation services provider and a Microsoft preferred solution, RackNap can help you not only prepare but leverage the most out of the NCE model.
Our solution experts are working to optimize the current operations and prepare for the upcoming changes so you can migrate to the new model without any hassles. Partner with us today to analyze options to take benefit of the available Microsoft 365 discounts before the price increases.
To align with Microsoft’s New Commerce Experience updates, RackNap too will be introducing new process updates across areas like:
- Implementation of new subscription options available under NCE: Monthly, 12-months, and 36-months along with new monthly term offer with 20% price premium.
- New cancellation policies: The 72 hours (UTC) cancellation window and other cancellation policies changes will be implemented within the automation platform to help customers automate the same.
- Upsell/cross–sell opportunities: Enhanced options to blend products and services as per NCE’s latest add-ons changes and separate availability.
- Easier addition of new products and trials: Add and manage new products seamlessly
Whether it is the price changes or license management, you will be able to manage the new updates through RackNap. Book a demo today to know more about Microsoft’s New Commerce Experience (NCE) and the steps we are taking to help you prepare for it.
Disclaimer: The information provided in this blog is for general informational purposes only. All the information is provided in good faith, however, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information in the blog. You are advised to visit Microsoft’s site for more information.
