As you may know, Microsoft has publicly announced significant policy and pricing changes to how Microsoft 365 product subscriptions are created and renewed across all of their partners and distribution channels starting in March 2022. Starting in March, the Microsoft New Commerce Experience (NCE) model introduces a set of standardized policies, agreements, and procedures that apply to all Microsoft 365 providers, including SBO. Specifically, Microsoft will be:
- Increasing pricing on six of their most popular Microsoft 365 products;
- Tracking and enforcing Microsoft 365 license subscription renewal dates based on the license date registered with Microsoft for the applicable user; and
- Offering Microsoft 365 subscriptions on either an annual term (with enforcement of early termination fees) or a monthly term (at a 20% price premium to the annual subscription rate).
MICROSOFT NCE ANNUAL AND MONTHLY SUBSCRIPTIONS – A COMPARISON
Annual subscriptions:
- pricing is locked for the 12-month term of the subscription, protecting you from potential future Microsoft price increases during that period
- cancellable within the first 72 hours after the subscription is created, but not after that (i.e., the purchaser is liable for license fees for the full 12 months)
- can be upgraded with additional seats
- are billed monthly
Monthly subscriptions:
- have a premium price of 20% over annual plans
- can increase or decrease number of seats each month
- are cancellable on a month-to-month basis
PRICING CHANGES
Microsoft is increasing the prices for the following products, and SBO prices will reflect these changes starting on March 1. New pricing will be in effect on March 1 for new subscriptions and for subscription renewals that occur after March 1.
Microsoft list price increases – effective March 1:
- Microsoft 365 Business Basic (from $5 to $6 per user)
- Microsoft 365 Business Premium (from $20 to $22)
- Microsoft 365 E3 (from $32 to $36)
- Office 365 E1 (from $8 to $10)
- Office 365 E3 (from $20 to $23)
- Office 365 E5 (from $35 to $38)
Under the NCE model, subscriptions will be either on an annual term, paid monthly, or on a monthly term as outlined below. Prior to NCE (legacy model), all subscriptions have been annual term subscriptions, billable monthly and SBO waived cancellation fees in the absence of Microsoft cancellation fees. Going forward, NCE cancellation policies will be enforced. These changes affect all Microsoft 365 products, including “Microsoft 365 Apps”. This does not affect SBO Hosted Exchange.
KEY DATES
New subscriptions: Starting March 1, 2022, all new subscriptions must be on NCE.
Legacy subscriptions: All legacy subscriptions with an anniversary date on or after July 1, 2022, must move to NCE before their anniversary date. We will provide information about renewal options later in February.
RECOMMENDED ACTIONS
- If you have any of the 6 SKUs listed above (with a scheduled March 1 price increase), you can lock your current price and avoid the price increase for 1 year by acting before the end of February. Your pricing will be locked into an annual NCE subscription, subject to annual plan cancellation policies. We will provide details in early February about how to do this.
- Under NCE, you will have to choose monthly or annual subscription terms for new or renewed subscriptions. Account administrators will be able to set default preferences in the SBO Control Panel. Subscription expirations will be visible in Control Panel by the end of January.