Microsoft CSP - New Commerce Experience

What is NCE?

The New Commerce Experience (NCE) “per seat” model for Microsoft 365, Dynamics 365 and Power Platform subscriptions are the latest in the evolution of their CSP program. It provides resellers with new tools to simplify and manage subscriptions

Why is it important to Partners?

The changes coming with NCE will potentially require some action on the partner’s side. Partners need to be mindful of the changes coming to pricing for monthly vs annual, the price changes coming in March, and the potential license ordering processes that might be necessary from their side

What this means for our Partners

Greater Agility and Customer Alignment

  • Promotional pricing on NCE subscriptions starting January 2022
  • Pricing benefits for annual term subscriptions that provide price protection
  • Enforced cancellation policy
  • Introduction of simplified upgrade options for selected offers

Operational Efficiency and Cost Savings

  • Improved subscription management capabilities
  • Automated subscription changes at renewal
  • Easier price list and reconciliation file processing

More Choices for Customers

  • Premium-price monthly term subscriptions that allow cancellation or seat-count reduction as needed
  • Easier adoption of new products and add-ons available separately
  • Consumption-based billing for telco offers

New promotional pricing to move customers to NCE

CSP Subscription Terms

windows10
office365
ems-es
microsoft365
windows365
powerplatform
dynamics365

Windows 10 E3/E5

Office 365

EMS/ES

Microsoft 365

Windows 365

Power Platform

Dynamic 365

line

12-month subscription term 

12- or 36-month subscription term

The Evolution of CSP on NCE

Legacy Billing Platform

New Commerce Billing Platform

windows10
office365
ems-es
microsoft365
windows365
powerplatform
dynamics365
azure

Windows 10 E3/E5

Office 365

EMS/ES

Microsoft 365

Windows 365

Power Platform

Dynamic 365

Azure Consumption services through the old Azure offer

line
azure-consumption
reservations
marketplace
marketplace2
server
licenses

Azure consumption Services through the new Azure plan

Reservations

Marketplaces SaaS offer

Marketplace usage-based offers

Server Subscriptions

Licenses for perpetual software

windows10
office365
ems-es
microsoft365
windows365
powerplatform
dynamics365
azure

Legacy Billing Platform

Windows 10 E3/E5

Office 365

EMS/ES

Microsoft 365

Windows 365

Power Platform

Dynamic 365

Azure Consumption services through the old Azure offer

line
azure-consumption
reservations
marketplace
marketplace2
server
licenses

New Commerce Billing Platform

Azure consumption Services through the new Azure plan

Reservations

Marketplaces SaaS offer

Marketplace usage-based offers

Server Subscriptions

Licenses for perpetual software

Subscription Terms in the NEW Commerce Experience

1-month Subscription

Enables customers to make subscription changes as they require (increase, decrease, suspend)

Monthly term subscriptions in the NCE will be priced at a premium compared to annual term subscriptions. | Meaning, a 1-month subscription will be 20% more expensive than an annual or 36-month subscription.

12-month Subscription

Regular Commitment

Billing options

  • Monthly
  • Upfront

36-month Subscription

Enables a customer to lock pricing for a full 36 months.

Specific to Dynamics 365 skus

Specific Terms and conditions apply

  • 3-year subscription;
  • non-renewable
  • prices revert to list price at end of 3rd year without the ability to cancel

Billing options

  • Monthly
  • Annual
  • Upfront

Management of Tenants

Pause

  • Subscription billing continues in “Paused” tenants
  • Subscription immediately enters “Disabled” status
    • Users cant access services or files
    • Admins can access data until the end of the Subscription term
  • Subscriptions can be made “Active” again

Cancellation

  • Partner receives a pro-rated refund in the first 72 hours
  • No refunds after the first 72 hours
  • Subscription immediately enters “Disabled” status:
    • Users cant access services or files
    • Admin can access data for 90 days
  • Cancellation cannot be reversed

Auto-Renew

ON

  • Subscription renews at the end of the term
  • 72-hour cancellation period starts

OFF

  • Subscriptions do not renew at the end of the term
  • Subscription enters “Disabled” status

Add On Policies

Add-ons are purchased as individual subscriptions, distinct from the base product subscriptions. Thus the end dates may not be the same

Partners will see errors when attempting to purchase new commerce add-on products when the customer does not have any of the prerequisites

This is a technical check across the whole of the customer tenant. It’s NOT a compliance check

Upgrades

For new commerce, upgrading means going from one paid subscription to another paid subscription

Full upgrade

  • In-place upgrade
  • All seats are upgraded
  • The subscription ID remains the same
  • Licenses are automatically assigned
  • Upgrade at any time

For Example:

Microsoft 365 Business Basic to Microsoft 365 Business Standard

Partial Upgrade

  • Some of the seats are upgraded
  • The subscription ID of the original subscription remains the same
  • A new subscription is created, which has an end-date that is coterminous with the original subscription
  • License must be manually assigned
  • Upgrade at any time

For Example:

Microsoft 365 Business Standard to Office 365 E1

Promos and Trials

Promotions and trials have preset limits (may be different limitations at SKU level). Promotions and Trials will also have pre-qualifying criteria that may include “license not being active in tenant”.

The seat limits from promotions are enforced across partners.

Promotion eligibility is enforced at the product SKU level that the partners are transacting, so a partner could get promotional pricing for 2400 seats of Microsoft 365 E3 and also a different product SKU Microsoft 365 E5.

Trials

Key facts

  • 25 licenses
  • 30 days
  • Can’t be cancelled
  • Auto-renew is On
  • Trials convert automatically to paid offers
  • No trial alerts

Automatic trial conversion

  • All 25 seats convert to paid offer
  • Paid subscription starts on the next day
  • Term duration: 1 year
  • Billing cycle: Monthly

Manual trial conversion

  • Trials can be converted to paid offers at any time during the trial period
  • At the conversion point, the 72-hour cancellation period starts when seats can be reduced
  • Partners can choose the same SKU or an upgrade

Incentives and Rebates

CSP Reseller Program

To earn Microsoft CSP Indirect Reseller incentives, a Partner must have obtained a Cloud Competency and the minimum threshold for said competency.

Microsoft has raised the co-op usage threshold from $4 000 to $10 000.

Microsoft calculates your monthly incentive earnings with a 60% rebate/ 40% co-op split on eligible licenses.

All incentives and Rebates will be removed from CSP Legacy in October 2022.

Microsoft Commerce Incentive

Partners must enrol in the Microsoft Commerce Incentive Program in Partner Center to earn incentives and rebates for subscriptions on New Commerce Experience. Partner Margin will remain the same.

Dates and Deadlines

14 October 2021

Technical preview 2 of NCE for Modern Work and Dynamics will be available for all partners.

1 January 2022

NCE for Modern Work and Dynamics 365 will reach general availability for indirect partners to offer to CSP resellers.

10 March 2022

All NEW subscriptions for Modern Work and Dynamics will be required to be procured through the NCE Platform.

30 June 2022

The ending of all renewals from Microsoft CSP legacy.

1 October 2022

Incentives only available for NCE transactions.

1 February 2023

All remaining subscriptions must be moved to New Commerce.

Common Questions

Q: When will the New Commerce Experience be available?

A: Microsoft released the New Commerce Experience through a technical preview 2 on 14th October 2021. General availability for all partners will launch in January 2022.

Q: Will partners be automatically moved to the New Commerce Experience in January 2022?

A: No, if a partner would like to move to the New Commerce Experience, they will need to migrate their existing subscriptions manually using the migration path First Distribution will provide. 

Q: Will partners be forced to move to the New Commerce Experience?

A: All new subscriptions for Modern and Dynamics will be required to be procured on the New Commerce Experience by March 2022. All existing subscriptions can remain on CSP legacy. Partners will be able to keep existing subscriptions on the New Commerce Experience and be eligible for incentives and rebates through to October 2022.

Q: Is Microsoft offering any incentives for partners to move to the New Commerce Experience right away?

A: To encourage partners to migrate to the New Commerce Experience ahead of the March deadline, Microsoft will offer two time-bound promotions to coincide with the January general availability launch. These offers will be available between January and June 2022 on monthly-term and annual term offers. The promotion will apply to all new commerce seat-based commercial offers for subscriptions of up to 2400 seats, except for Windows 365 products.

Q: Can a partner have a customer tenant with both an annual commitment and a monthly commitment for the same subscription?

A: Yes, a partner can have a customer on both monthly and annual purchasing options for the same subscription.

Q: Can partners receive price protection if they provide a new or renew a license on or before the price change date of 1st March?

A: A partner can lock in price protection before the price increase in March 2022 by purchasing an annual commitment on the New Commerce Experience. If the partner purchases an annual subscription on legacy before March 2022, they will forfeit any incentives and rebates that would be paid out after October 2022.

Q: If customers who are purchasing through Microsoft direct want to move to Indirect CSP or are purchasing from one MSP and want to move to another, will they have to wait until the renewal period to change the channel to avoid duplicate billing?

A: Change of channel can only be done without penalty during the renewal period. If a change of channel is done within the term, the customer is responsible for the full payment of their agreement.

Q: What is the cancellation policy for subscriptions on the New Commerce Experience?

A: Partners have 3 days after purchase to cancel a subscription for a pro-rated refund. The 3 day period begins on the same day a partner starts a subscription, and no refunds will be granted after the 3 day period. Once a subscription is cancelled, this cannot be reversed. The subscription will immediately enter a “disabled” status where users cannot access services or files, however, admins will have to access data for subscription/s for 90 days.

Q: What is the renewal date for newly added seats to a subscription on the New Commerce Experience?

A: The renewal date for the newly added seats on the existing subscriptions will match the original renewal date for the subscription.

Q: Will partner margins be affected by the New Commerce Experience?

A: As of right now, First Distribution Partner margins will remain the same.

In this pre-recorded session, Musa Skosana and Kejendree Pillay, the Modern Work and Security Product managers for South Africa and Africa, will take you through the New Commerce Experience and what it means to you, our partners.

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