Microsoft’s New Commerce Experience: 10 Things You Should Know
What do you need to know about NCE? Microsoft’s New Commerce Experience (NCE) has been around for Microsoft Azure since 2019, but now it’s expanding to include M365, Dynamics 365, Windows 365, and Power Platform.
While technical previews have been underway since October, the general release date is fast approaching. We wanted to answer any questions that Microsoft partners may have beforehand. Without further ado, here are the most common questions we hear about NCE—and their answers.
1. What is NCE?
As Microsoft puts it, “The new commerce experience makes it easier to transact with Microsoft…It’s a multi-phase, long-term investment in the CSP program aimed at helping our partners accelerate business growth, simplify licensing, and address how their customers prefer to purchase.”
Whereas before, NCE only existed for Microsoft Azure, it’s now a Microsoft-wide initiative that introduces a standardized way of doing business, both directly with customers and through partners.
The ultimate goal of introducing NCE is to enable partners and customers to have more choice and buy more easily while optimizing costs. This is evident through the consistent and simplified purchasing experience, the greater standardization of offers and terms, and the opportunity for partners to sell or upsell to a larger set of existing and new customers.
Please note, the initial rollout of NCE for CSP subscriptions will only be for commercial offers. Government, education, and non-profit offers are expected to be introduced to NCE over the coming months, but there is currently no date for when these subscriptions will be available in New Commerce.
2. How will NCE affect partners?
NCE will offer some distinct benefits for partners, allowing them to serve customers better and have an easier time with the platform themselves.
- Greater sales agility and customer commitment: NCE offers pricing benefits for annual term subscriptions that lock in pricing for the entire term (plus a promotional pricing period starts in January 2022).
- Operational efficiency and cost savings: NCE makes it easier to manage subscriptions, with enhanced provisioning, pausing, automated changes at renewal, and efficiency for quoting and price list management.
- More choice for customers: The introduction of the new monthly term subscription will allow customers to cancel or reduce seats more easily than an annual term, at a premium price. It will also be easier to adopt new products and add-ons separately.
3. How will NCE affect customers?
There are also a number of things that make NCE more flexible and accommodating for customers, such as:
- New products, with more options: The new Windows 365 is now available for Cloud Service Providers (CSPs). There are also free trial choices with an easier conversion to being a paid customer, as well as new add-ons available only on NCE.
- Offers to meet specific or changing needs: For a premium, Microsoft will now offer new monthly-term subscriptions, allowing customers to cancel or reduce seat counts on a monthly basis. Monthly subscriptions can also be combined with annual subscriptions to help customers balance cost.
- More value for commitment: Customers can access the best pricing on annual terms with long-term protection. They can also lock in pricing further with multi-year terms, and switch from a monthly to an annual term easily to save money.
4. When are commercial subscriptions moving to NCE?
There are a few dates to keep in mind. Any new subscriptions will have to be made on NCE after March 2022. However, the ability to renew existing subscriptions on the legacy CSP platform will continue through June 30th 2022, ending on July 1st 2022. Legacy subscriptions will remain in effect until each of the subscription terms end, but Microsoft partner incentive rebates on legacy subscriptions will be removed in October 2022. After June, legacy customers will have to renew subscriptions in the New Commerce Experience before each subscription expires to ensure the services continue.
5. Can I have one customer on the same SKU with multiple terms?
Yes, you can have a customer on different terms, with different sets of seats, for the same offer. In the SMB space, it’s more common to have seasonal or temporary employees over the course of the year, for example in the restaurant and tourism industries. For these customers, mixing Annual and Monthly agreements for permanent and temporary users can be the most cost effective option.
“For example, a growing organization can minimize license fees and lock in predictable pricing for new users with an annual or multi-year subscription. However, that same organization can further minimize costs and maximize flexibility by including monthly subscriptions for any licenses that are expected to be unused for more than 3 months each year. As a partner, you can elect to have monthly, annual, or multi-year term expiration, which gives you maximum flexibility where term length is concerned.
6. How can I start an NCE subscription?
Partners will continue to use the Secure Cloud – Partner Portal to start subscriptions.
7. How do I cancel, and will I receive a refund?
With NCE, a cancellation policy will be enforced for all terms. A subscription can only be cancelled or downgraded within 72 hours of the initial order or renewal, for all term types. A prorated refund will be provided for cancellations, with proration calculated daily within that 72-hour span. After 72 hours, that cancellation function will not be available. Suspending an account can prevent users from accessing the subscription, but billing for that subscription will continue.
8. Can I reduce seats during an existing contract?
Like cancellations, seat counts on a new commerce subscription can be reduced within the first 72 hours. However, 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.
Conversely, if customers want to add seats, they will be priced at the original subscription purchase price (not the current price). Overall, this means that the price for additional seats will always be locked in at the beginning of the term.
9. Will there be promos? When?
Microsoft has announced a promotional period for NCE commercial offers that begins January 10, 2022 and runs through June 30, 2022. During this time, customers can choose a monthly subscription without paying the 20% premium, aligning monthly term pricing with annual term pricing. From January 10, 2022 to March 31, 2022, customers can choose an annual subscription and lock in a 5% discount off the annual term pricing. Microsoft has indicated they may extend this 5% promotion, possibly all the way through June 30, 2022.
10. Will there be any new features?
Yes! Microsoft is introducing a number of new features to help partners with how they manage subscriptions, billing, and data processing. Here are a few:
- The ability to schedule changes at subscription renewal: Partners will be able to schedule different seat counts, SKU conversions, term-length renewal changes, and renewals to different billing options. This allows partners to manage subscriptions in advance instead of performing manual changes at renewal, which improves operational efficiency.
- Automatic seat assignment with full upgrade: Whereas before, this was only possible with SMB SKUs, now seats can also be assigned automatically at upgrade with enterprise-level SKUs. This creates easier and more efficient subscription management for larger customers, saving partners a lot of work.
- Auto-renewal toggle option: Now, partners can toggle auto-renewal and submit it manually. This makes it easier to manage renewals and plan ahead for subscriptions that will be terminating soon.
- Switching partners:.Customers will not be able to transfer active subscriptions to a new partner. New subscriptions and additional users may be added via a new partner, but customers will continue to be responsible for existing subscription terms.
- Subscription ownership enforcement: Previously, customers could buy from different partners to aggregate instances of the same SMB offer and buy multiple free trials. Now, Customer SKU limits will be enforced across multiple partner tenants, preventing a customer from purchasing multiple lower-cost SMB SKUs beyond defined limits from different partners. This prevents customers from gaming the system, and ensures that partners can maximize revenue from each customer.
- Suspend/resume subscriptions: Previously, a partner would have to suspend and then reorder subscriptions if the term expired. Now, a partner can suspend and then resume a subscription at any time during the term without cancellation. Partner billing will continue through the suspension. This helps the partner by allowing them to pause until the customer remits an overdue payment.
Note on M365 price change
In addition to launching the New Commerce Experience for CSP’s, Microsoft also announced commercial pricing changes for some key Microsoft 365 SKU’s around the same time. Although these price changes are unrelated to NCE, it’s good to be aware of how they could impact you and your customers. This pricing increase reflects the value of the solutions and the added areas of innovation around communication and collaboration, security and automation. The pricing changes will go into effect on March 1, 2022. You can read more about that here for a clear and graphical breakdown of these changes.