Microsoft New Commerce Experience (NCE) and new subscription options…. Time to get ready!
What is the New Commerce Experience (NCE)?
Microsoft recently announced a change in how customers purchase and manage their licenses through their Cloud Solution Provider (CSP) Program.
Microsoft is launching the New Commerce Experience (NCE). This change will impact the way you purchase Microsoft 365 licenses.
Microsoft has launched NCE intending to reduce complexity and provide cost savings for long-term commitments, changing its subscription options to focus on annual terms. The majority of Microsoft licensing was already on an annual basis, but Microsoft will enforce the commitment beginning in 2022.
Below KNL will summarise the options and advise how to avoid any impact to your business.
Licensing Options
Option 1: Annual Billed Monthly
For many organisations, the most similar model to your current experience will be the Annual Billed Monthly option. It’s also likely that this one will have the least impact to your business and budget.
Annual Billed Monthly lets businesses establish license counts up-front. You pay a monthly fee based upon the initial count, avoiding price increases during the one-year term. If licenses are added during the term, the monthly fee is increased accordingly and represents the new monthly fee for the remainder of the term. As per Microsoft, licenses can be added at any time but cannot be removed until the end of the one-year term. Upon renewal, you can reduce license count, renew the subscription as is, or opt into one of the other subscription models.
This might work for: A company that wants predictable monthly costs and will not be changing license counts significantly throughout the term. This model is a good fit for most businesses.
Option 2: Annual
Annual pricing doesn’t offer a pricing advantage over the Annual Billed Monthly option. If you prefer to pay for your licensing in a lump sum for budgeting purposes, you can with this model.
With Annual licensing agreements, you pay for all current license counts up-front for one year. As with the Annual Billed Monthly agreement, you’ll avoid price increases announced during that term. Licenses can be added at any point but cannot be removed until the end of the one-year term.
This might work for: Organisations that have grants, loans or dedicated funding for specific purposes, such as IT expenses.
Option 3: Monthly
Month-to-month licensing offers the most flexibility. However, you pay for it with a 20% premium on top of pricing increases. If you’re a smaller organisation, this might still be your best bet, especially if you foresee needing to make frequent changes to your licensing. In some cases, the ability to decrease seats and remove licenses makes this option more cost effective. This can also be combined with the Annual term licenses. You can have the lower cost for your baseline licenses on an annual commitment and a number of additional licenses on a month-to-month model that you can adjust up or down as needed.
This might work for: Businesses that need flexible licenses for seasonal workers.
Working with a trusted partner like KNL vs. doing it yourself or working with a standard CSP
There are many ways to procure licensing, but they’re not all created equal – and choosing solely based on initial cost may end up being more expensive in the long run.
The level of service you receive with your licensing correlates directly to your relationship with the provider. There’s a wide range of Microsoft Cloud Solution Providers (CSPs) and true IT partners, and some who simply offer access to licensing with limited support. Microsoft has also made it possible to handle the licensing process yourself – although we don’t recommend that strategy. Here’s an example of what the licensing process can look like between those two models.
The licensing options:
- Do it yourself: You go directly to Microsoft, research the licensing options and compare them yourself using Microsoft’s licensing program guides (which offer hundreds of pages of information). You decide on what you think is a good fit, complete payment through an Enterprise Agreement, the Microsoft Sales Team, or Microsoft Online and you’re on your way. If there are any issues with the licensing, or technical issues, you’ll need to work with Microsoft sales or support directly to get the help you need.
- Work with a standard CSP: You reach out to a standard CSP (often through a web inquiry, portal or form submission), and choose licensing based on the applications you want, your industry and the size of your business. You purchase the licensing through your CSP. If there are any issues with the licensing, or you experience technical issues, you must reach out to an Account Manager, who may then reach out to Microsoft on your behalf to try to get the help you need. This is typically done on a “best effort” timeframe. Depending on how long this process takes, you could lose hours or days of productivity.
- Working with a true IT Partner and CSP like KNL: You express a need for Microsoft licenses. In a one-on-one conversation, a KNL specialist asks you questions about your business needs and what you’re looking for. Understanding your business goals as well as the organisation size, industry, and technical needs, KNL makes customised recommendations based on your conversation and advises you on how this solution can be used to achieve your goals. We decide on the right licensing SKU and model together. You agree to the terms that work best for you, feeling confident about your choice. When you need to make changes to your licensing, you simply reach out to KNL and discuss the situation. KNL takes care of adjusting everything for you. If you have technical issues, you reach out directly to KNL and our technical staff provides support, working to resolve the issue quickly and engaging Microsoft as needed.
While the SKU and licensing may be technically the same regardless of who you purchase from, the level of client service isn’t. Different MSPs and CSPs offer different benefits to their clients, and that’s something to consider when evaluating your licensing needs. A lower cost is appealing initially but can easily disappoint or go over budget when account service or technical support are needed. At KNL, our support doesn’t just check the boxes for the bare minimum that Microsoft requires for CSPs. We pride ourselves on supporting clients through everything, from consultation to implementation and support.
If you have any questions or concerns please contact the KNL Sales Team
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Tel: 03456 786 500, option 2
