What is the Microsoft New Commerce Experience and how will it affect you?
There are some major changes coming to the way that Microsoft charges for its seat-based subscription products. Microsoft’s stated aim behind these is to reduce complexity for customers whilst offering more flexibility. In this blog I’m going to explain what those changes are and explain who will be affected by them.
Which products are affected by the change?
The changes apply to the following products with seat-based subscriptions:
- Microsoft 365
- Dynamics 365
- Power Platform
- Windows 365
- Associated addons
What will be changing?
The changes primarily impact two different aspects of subscriptions – the commit terms that are available and the flexibility that is offered.
There will be three commit terms available – one month, one year and three years. The one-month option is how it is licensed currently and enables customers to access Microsoft products on a short-term basis without the need for an annual commitment. This gives maximum flexibility but that comes at a price. Microsoft has announced that the one month commit term will be 20% more expensive than the current legacy pricing option.
The one-year term will have the same price as the current legacy pricing. The three-year option is currently only available for Dynamics 365 subscriptions, but it is likely that other products will also have three-year subscription options added.
Do I have to pay annually?
No – you can opt for a one-year commit term and either pay for the whole cost or split it over monthly instalments if you prefer. However, you won’t be able to decrease the seat count or change the subscription type until the annual renewal. You will still be able to increase your seat count whenever you like – you won’t have to wait until the annual renewal to do that, only if you want to decrease. Similarly, you can upgrade to the next level at any time during the year – if you do so then your newly upgraded subscription will be pro-rated to the commit term and end date of the original subscription. However, you will not be able to downgrade your subscription until the renewal date.
Can I mix up different commit terms?
Yes, you can. You can mix and match commit terms to fit the needs of your organisation. For example, where you have roles within the organisation that are likely to remain stable over time such as directorate level roles and senior managers you can opt for one year commit terms whilst at the same time opting for one month commit terms for other roles such as seasonal workers, for instance. In some cases, it may still be that a shorter monthly commitment is cheaper than paying for a full year. We can help you work out what the best, most cost-effective option is for you to help ensure that you’re getting everything you need at the best possible price.
When do I need to decide if I want to switch?
The Microsoft New Commerce Experience was announced last year. Originally the plan was that any clients who did not wish to transition to the new system would have to renew their subscriptions by 10 March 2022 but this deadline has now been extended to 30 June. That said, Microsoft is offering a 5% discount as an incentive for switching to the annual commitment between now and March so this is a good time to be thinking about what you want to do.
How can Allware help?
Get in touch with us today to talk about how these changes impact on your organisation. We can help you assess your current utilisation and recommend the best option for you that offers the balance of flexibility and cost effectiveness that you need.