With many customers transitioning from on-premises software to the cloud, Microsoft has changed its licensing models to match this current digital transformation through a New Commerce Experience (NCE).

NCE will change how you purchase Microsoft online services such as Microsoft 365. It aims to reduce complexity and provide cost savings for longer-term commitments. The new experience allows you to purchase your licences through a single agreement, streamlining your Microsoft investments. Microsoft has made these changes to provide consistent, simplified and convenient ways to purchase its products. Accepting one straightforward purchasing agreement that’s always up to date and doesn’t expire simplifies buying process and also relieves meaningless administrative overhead, and no lengthy paperwork is required.

What changes should you expect?

In January 2020, Microsoft announced options for buying Azure services through the Microsoft Customer Agreement. Beginning January 2022, they’re launching the next phase in which Azure will be joined by seat-based offers for Microsoft 365, Dynamics 365, Power Platform, and Windows 365 through the improved commerce experience.

From March 1st 2022, you will only be able to purchase and renew licences through the Microsoft Customer Agreement. However, you can move your licences over before this to streamline your subscriptions and maximise the benefits. Note, from January 2022 to March 2022, you can still place legacy orders, but Microsoft Customer Agreement will be the highly recommended route at that point in time.

This licensing change means that Microsoft can add extra capabilities, offer cross-licence programs, and deliver an end-to-end set of features. NCE enables you to buy a wide range of products with different terms to tailor them to your business’s needs and assist your business for future growth with its more user-friendly options. Not only this, but employing seat-based offers early in this transition will simplify licensing and give you additional options.

We advise planning accordingly to this change, even if you take a phased approach.

What are the new licensing options?

Monthly subscription
A monthly subscription is made for flexibility and there is no obligation to continue after each month. However, this option has an increased price of 20% over the annual option, and although the price is locked in for that month, it can change at the time of the next monthly renewal.

You have a 72-hour cancellation window from the start of the agreement, and you can upgrade mid-term for some products. Decreases in seat count are not permitted until the end of the month, and these changes coincide with when the licence term ends.

12-month subscription
An annual commitment gives you stability and a cost-saving as the price is fixed for the contracted term. If you do choose the 12-month subscription, you will have the option to be billed on a monthly* or annual basis.

Again you have a 72-hour cancellation window and during the contracted subscription you are able to increase the quantity of seats, add-ons and upgrades at any time (these changes run until the licence term ends).

36-month subscription
As a part of NCE, multi-year pricing will now be available. This subscription will allow you to secure a three-year price upfront, giving you security and potentially a large cost saving across the period. With this subscription, you will have the option to be billed monthly, annually, or pay up front.

Monthly Subscription 12-month subscription 36-month subscription
Payment optionsMonthlyMonthly* or annualMonthly*, annual or pay up front
Cancellation/adjustment window72 hours72 hours72 hours
Seat changesIncrease anytime. Decrease within the adjustment window (monthly) Increase anytime. Decrease within the adjustment window (annually) Increase anytime. Decrease within the adjustment window (every three years)
Pricing20% increase over 12-month subscriptionStandardStandard
Available fromJanuary 2022January 2022March 2022

*Subject to terms

Benefits and features

Microsoft’s New Commerce Experience includes various new features which will be available in March 2022.

Home Use Programme (HUP) – The Home Use Programme will allow employees of organisations who consume online Microsoft services to receive a 30% discount on purchase of certain Microsoft 365 consumer offers.

Hybrid Use Benefits (HUB) – Hybrid Use Benefits will allow organisations to further capitalise on their Microsoft investments made via the CSP programme.

Multi-Geo – Multi-Geo allows organisations to provision and store data at rest in the various geo-locations that they have chosen, to meet data residency requirements.

These new licences allow for an easier option for trying new products, free trials, add-ons and they provide that flexibility that customers enjoyed in the legacy licences.

Ultimately, Microsoft’s New Commerce Experience will position you for future growth, provides you with multiple cost-saving options and give you more opportunities to try new products through free trials and add-ons.