As of June 30, 2022, software giant, Microsoft has changed how customers purchase and manage their software licenses through their Cloud Solution Provider (CSP) program. This change impacts the purchase of software licenses for Microsoft products such as Microsoft 365, Dynamics 365, Windows 365, and Power Platform for commercial seat-based offers.

Why the Change?

Microsoft’s goal with its New Commerce Experience (NCE) was to give customers greater options and more flexibility with how they purchased licenses for Microsoft products. The biggest changes that will impact end users like business owners come in the form of changes to price, billing, and how Microsoft licenses products like those mentioned above.

Billing and Contract Changes

One of the worst things that can happen to a business owner is a large, unexpected bill. As business owners, we all work off of a budget and an unexpected price jump can have a huge impact on your bottom line. To prevent this from happening to your business for Microsoft’s new pricing and contract changes, it’s best to know your options.

As of June 30, Microsoft’s NCE went into effect giving business owners the option to commit to purchasing licenses long-term or to go on a month-to-month contract. Each contract option has benefits and drawbacks depending on the stability of your business and the plans for your business’s future.

With the NCE, business owners and IT managers have a choice to purchase Microsoft 365 licenses on a monthly, annual, or even tri-annual basis. A monthly plan allows your business to flex with its employee needs so it can purchase more licenses as it grows or purchases fewer as employees leave. A long-term commitment locks your business in at a certain number of licenses, but it also reduces the cost of the licenses in the long run.

The Month-to-Month Option

Microsoft’s month-to-month licensing option allows you the flexibility to add or subtract software licenses as they are needed. The monthly plan allows you to enjoy a prorated price throughout the billing cycle so you can add more licenses as you onboard new staff. This also means if your business experiences a reduction in staff, you can just cancel the extra licenses you aren’t using at the end of the month.

A monthly billing option offers more flexibility at a higher cost, but, depending on your business, could ultimately save your company money over time.

The Long-Term Commitment

The other option businesses have with the NCE is a long-term licensing commitment. Business owners, managers, and IT leaders can choose to license Microsoft products for 12 months or even 36 months at a time. These long-term subscriptions lock you into the current price to save your business money over time by protecting it from price increases over the term of the contract.

A long-term option locks you in at a lower licensing price, allows for flexible payment options, and you can easily increase the number of licenses but you cannot decrease the number of licenses you have purchased and you are stuck with your licensing provider for the term of your contract.

Mistakes Happen

Luckily, Microsoft understands that to error is human and had made accommodations for that. In the event that you have purchased too many licenses or signed up for the wrong subscription, Microsoft allows a seven-day window to cancel or reduce your product licenses.

This cancellation policy is good for all new NCE subscriptions. It also extends to partial upgrades, renewed subscriptions to NCE products, and even migrations from legacy products. Please note that all legacy incentives will end on Dec. 31, 2022, so now is the time to get that done. Charges for canceled subscriptions or reduced licenses will be prorated from the time the subscription was created to the time it is canceled.

Business Voice Converting to Teams Phone

Microsoft also announced on June 29, 2022, that businesses utilizing Business Voice will now have until September 28, 2022, to renew their subscription to that service. That service will be honored until the contract term expires at which time the business has the option to convert to Teams Phone on NCE. Please note that Business Voice customers will not be automatically transitioned to the new licensing model and business leaders will need to consult with their licensing provider to make the transition to Teams Phone on NCE.

Extra Notes

Nonprofits, educational institutions, and government entities will not be offered licensing options on the NCE at this time. Nonprofit and educational products were not impacted by the rate increases that went into effect in March 2022.

As for added license subscriptions, those are purchased on an individual subscription basis. That means the end dates for product licenses may not be the same from license to license.

Additionally, trials on NCE will allow 25 licenses that are valid for up to 30 days, and trial subscriptions cannot be canceled. Trial subscriptions are automatically converted to paid subscriptions.

ORAM’s Recommendation

When it comes to ORAM’s clients, we highly recommend contacting us to review what has been happening with your business in the last year, what your future goals are, and your staffing plans in order to select the option that will make the most sense for your organization. Our goal is to get you the licensing you need at the best cost with the flexibility that suits your company’s individual needs.

To schedule an appointment with ORAM Cybersecurity Advisors to review your Microsoft licensing options, contact us at (617) 933-5060 today! We can also help your business with cybersecurity, meeting regulatory standards, and other information technology solutions.