Prices are going up. Are you prepared?
Update: Microsoft just extended the grace period to lock in Feb 2022 pricing. March 14th is the last day to take advantage of the promotion to keep your pricing for the next 12 months.
How you purchase licensing for Microsoft 365 is changing starting March 15th, 2022.
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Microsoft’s ‘New Commerce Experience’ (NCE)
Today, your Microsoft 365 licenses are purchased under what is called “Legacy CSP”. This program has great flexibility allowing you to cancel M365 licenses at any time, and have your usage prorated.
Microsoft is launching the “New Commerce Experience” or NCE, a program that is designed to provide a consistent and standardized purchasing experience. But it does mean some big changes from what you are used to.
- Under Microsoft NCE, the flexibility of a monthly subscription will come with a 20% premium price. In addition, licenses canceled mid-month will be billed for the full month.
- A 12-month term option is available, avoiding the monthly premium. This can be paid upfront or monthly.
- After a 72-hour cancelation period, the client is committed to the full term of the agreement with no early cancelation.
- Clients cannot move subscriptions to a different provider while committed to the term.
Microsoft Global Price Increase
In addition to the introduction of Microsoft NCE, there will also be a global price increase on several Microsoft SKUs effective March 15th, 2022. While Microsoft 365 Business Basic and Business Premium will see an increase, Business Standard and Non-profit pricing will not be impacted at this time.
Organizations that move to a 12-month term under the new Microsoft NCE by March 14th, 5 pm PDT, 2022, will be price protected against this increase and have their current pricing locked in for 12 months.
Price Changes – Effective March 15th, 2022
Enterprise:
- Office 365 E1: $10 (from $8)
- Office 365 E3: $23 (from $20)
- Office 365 E5: $38 (from $35)
- Microsoft 365 E3: $36 (from $32)
Business:
- Microsoft 365 Business Basic: $6 (from $5)
- Microsoft 365 Business Premium: $22 (from $20)
No changes to other licenses:
- Non-Profit/EDU Plans, Business Basic, Business Standard, and F1/F3 Plans
WEBINAR
Watch this 10-minute video for a quick summary of the changes.
Considerations
- The number of seats; additional users and services may be added at any time, but not seat reductions.
- If you have seasonal employees or temporary accounts, you may wish to leave them on monthly to allow for easier cancellation. Companies can have a mix of both annual and monthly subscriptions.
- Even on an annual commitment, you can still be billed monthly, as you are today.
- There is no early cancellation on term agreements. After the first 72 hours, you are committed to these licenses for the full 12-month term.
Interested in Microsoft 365? Let's Connect!
FAQ’s
Q: If I add a user after the NCE signup, is it month to month? Or will it be a whole year from when I added that license? Or does it co-term with my original subscription date?
- Added seats will be priced at the original subscription purchase price. The renewal date for the newly added seats will match the original renewal date for that subscription. Overall, this means that the price for additional seats will always be locked in at the beginning of the term.
Q: Can I reduce seats during an existing contract?
- Seat counts can be reduced within the first 72 hours. If there’s a midterm order of additional seats, you will also have a 72-hour window to reduce that back to the original number of seats. You are locked into the number of seats for the 12-month commitment. You can reduce seats, at the time of renewal.
Q: What if I don’t sign up by March 14th?
- The legacy subscription will continue until it expires at the end of its term. To renew, the subscription must be moved to the new commerce platform.
Q: What is the new price for Microsoft 365? Which SKUs/segments are impacted, and which ones are not?
On March 15th, 2022, the following price updates will go into effect:
- Enterprise: Office 365 E1: $10 (from $8), Office 365 E3: $23 ($20), Office 365 E5: $38 ($35), Microsoft 365 E3: $36 ($32)
- Business: Microsoft 365 Business Basic: $6 (from $5), Microsoft 365 Business Premium: $22 ($20)
- No changes: Non-Profit/EDU Plans, Business Basic, Business Standard, and F1/F3 Plans
Q: When should my business consider a monthly agreement vs. an annual agreement?
- There are a few scenarios where the flexibility of a monthly agreement outweighs the increased costs. Consider a monthly agreement if you expect your business to downsize significantly during the year, if you expect to be acquired and don’t want the liability of an annual agreement to contend with, or if you plan on splitting your business into multiple smaller entities.
Q: Can I have both a monthly agreement and an annual agreement?
- Yes, you can. Consider using multiple agreement types when you need additional staff for a few months (a seasonal business, for example). Monthly agreements are also useful if you are testing out the usefulness of new features or an upgraded license.
Q: What happens after the first 12-month term? Will my pricing go up then?
- Yes, although future rate increase information isn’t available.
Interested in Microsoft 365? Let's Connect!
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